AVMA Policy Update On Online Sales Tax

The AVMA has shows support via an adopted policy in agreement with states collecting sales tax on online purchases by out-of-state customers.

The American Veterinary Medical Association (AVMA) adopted a policy at the association’s June executive board meeting that supports states collecting sales tax on online purchases by out-of-state customers.

The AVMA State Advocacy Committee proposed the association's new policy stating that current federal law puts brick and mortar merchants at a disadvantage compared with online retailers who can charge less for the same products.

“It's about leveling the playing field,” said Dr. Sullivan, owner of a five-doctor small animal practice in Torrance, Calif. and member of the state advocacy committee. “I have no problems competing with any other form of veterinary medicine as long as we're on the same playing field.”

Congress has prohibited state and local governments from levying sales taxes on Internet access since the 1990s. Lawmakers extended the law three times, most recently with the Internet Tax Freedom Act Amendments Act of 2007, which continued the sales tax moratorium through Nov. 1, 2014.

The AVMA committee explained in its recommendation to the executive board that veterinary clinics in states selling drugs on-site must charge sales tax, while Internet pharmacies can sell the same drugs across state lines at a cheaper price because they aren't subject to the same tax requirements.

This price advantage for online retailers ranges from 4 to 9.75 percent, depending on state and local sales tax laws, according to the committee.

The AVMA committee noted in its recommendation to the executive board that states expect to see a continual decline in sales tax revenue as more residents purchase products online from out-of-state vendors.


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