Call it revenge of the old guys.
A coalition of traditional retailers such as Target (TGT) Home Depot (HD) and JC Penny (JCP) are going after their online rivals over sales taxes.
The Alliance for Main Street Fairness is running ads saying because the stores have to collect sales taxes while online firms such as Alibaba (BABA) and Amazon.com (AMZN) generally don t they are at a disadvantage that could run them out of business.
Thanks to the online sales tax loophole this Chinese company will decimate our local retailers. Unless Congress ends special tax treatment for Alibaba and other online giants Main Street will never look the same the ad warns.
In a statement to Yahoo Finance Alibaba gave this response about the new spot.
This advertisement is not fact based. The Alibaba Group pays its taxes according to the laws in the country it does business and the U.S. is no exception. The Alibaba Group remains focused on providing U.S. based companies the opportunity to bring their products and services to the Chinese market through our various online properties.
Yahoo Finance Senior Columnist Michael Santoli says this debate is nothing new.
When you buy things online in almost every case you don t have to pay state sales tax because it s essentially across state lines he points out. This is a long running argument that s gone on between physical retailers and online rivals mostly eBay (EBAY) and Amazon.
But what s changed the game Santoli adds is the arrival of a new player a very large one.
The old line retailers are kind of grasping at this new presence this massive company called Alibaba he notes. And being a foreign company they are villainizing it and saying they re going to come in and dominate and put us out of business.
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In its ads the group suggests Alibaba is getting a holiday gift from Congress. Santoli says it s a not so subtle hint that the giant Chinese e tailer is hurting American firms even though Alibaba still really hasn t landed on U.S. shores.
It s purely hypothetical he points out. Alibaba really doesn t have much of a consumer presence in the U.S. they re very busy dominating in China and elsewhere in the world. Now they probably do have designs on coming here and becoming a big e commerce player but that s not priority 1 for the company.
But Santoli adds that s not the point.
The group that s put on these ads says we know they aren t here now he explains. But they re so big overseas and have such tremendous financial resources that if they decided to come over here it could be game over because they would be so powerful.
Santoli believes the real reason for the ad campaign is to get the attention of Washington.
It s conveying their interest and point of view in how this debate plays out he says. And they re trying most of all to persuade lawmakers to create some kind of sales tax on online commerce.
However he says don t bet on it.
This idea has died many deaths in Congress he notes. A Senate measure was passed but Speaker of the House John Boehner has kind of said the current measure is dead in the lame duck session. So it doesn t seem there s a lot of immediate momentum for this kind of measure to pass.
Yahoo (YHOO) parent of Yahoo Finance holds about a 16% stake in Alibaba.
Alibaba
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