The AIB coalition works on a range of important policy issues to ensure that independent businesses have a fair opportunity to succeed. Issues are identified in part based on our latest research on the challenges independent businesses face, including our Independent Business Survey.

To address these issues, AIB conducts and compiles research, advocates for policy change, and elevates independent business perspectives in the media. We have also developed advocacy tools such as this Local Policy Action Toolkit and Guide to empower independent businesses to participate in the policy process themselves.

Our current issue areas and examples of supporting work are outlined below.

Access to Credit

Photo: Accounting.

Local entrepreneurs are struggling to secure the financing they need to start and grow their businesses. The availability of loans and capital for local small businesses has declined significantly over the last decade. In 2016, AIB’s national survey of 3,000 independent businesses found that one in three independent businesses that applied for a bank loan in the previous two years failed to secure one. These figures were significantly worse for businesses owned by people of color, women, and immigrants, as well as very small businesses or new start-ups, whose expansion has historically been a key source of net job growth.

We support policies to reverse the decline of community banks, which provide the lion’s share of small business loans. We support efforts to ensure that SBA loan guarantee programs provide an adequate, sound, and efficient means of expanding credit access, particularly for very small businesses. We favor exempting loans made by credit unions to very small businesses from the current cap on credit union business lending.

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Antitrust and Competition Policy

In today’s highly concentrated markets, the ability of dominant companies to exclude and impede small businesses from competing has become one of the most pressing issues facing our members. A growing body of evidence suggests that anticompetitive behavior may be behind a sharp drop in the rate of new business formation as well as a decline in the overall number of small businesses operating in the U.S. This decline in entrepreneurship has troubling implications for job growth, innovation, community well-being, and the aspirations of Americans.

In surveys, our members report that anticompetitive behavior by dominant companies is having a significant negative impact on their businesses in several ways. In e-commerce, for example, Amazon has become a powerful gatekeeper, controlling access to the market for small retailers and manufacturers, while also competing against them. Markets for essential services that small businesses depend on, such as credit card processing, are often highly concentrated, enabling dominant suppliers to charge excessive fees.

We believe that the antitrust pendulum has swung too far in the direction of a lax approach by both enforcers and the courts, and that enforcement has also failed to keep pace with the ways technology has altered the dynamics of market power. Congress has a critical role to play in correcting this, both by spurring enforcement agencies to adopt a more aggressive approach and by clarifying the intent of antitrust laws so as to better guide the courts in their interpretation.

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Economic Development Subsidies


Each year, cities and counties provide hundreds of millions of dollars in tax breaks and other incentives to support the construction of shopping malls, big-box stores, chain hotels, and other developments. These giveaways flow overwhelmingly to large companies, giving them an advantage over locally owned businesses. Amazon, for example, has attracted more than $1.2 billion in subsidies for its warehouses. What’s more, research shows that these subsidies are often ineffective. In the St. Louis metro area, for instance, a study commissioned by the region’s local governments found that they had diverted more than $5.8 billion in public tax dollars to subsidize private development over a 20-year period, but that the region had seen virtually no economic growth. Instead, the giveaways contributed to poor fiscal health experienced by some of the region’s cities.

We favor closing tax loopholes and ending subsidies that give big businesses an unfair competitive advantage over local, independent businesses.

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Government Procurement

Governments spend a lot of money on goods and services, and their procurement and contracting policies are important mechanisms for promoting competition and ensuring opportunities for independent businesses. In recent years, big businesses have sought to capture a growing share of public sector purchasing contracts and, in some cases, to lock independent businesses out of the government marketplace entirely. Furthermore, as big companies gain market and political power, some are lobbying for policy changes to procurement systems that tilt the scales even further in their favor.

We support fair, transparent, and accessible procurement systems — whether in the form of an independent online marketplace or in more traditional government contract and bidding processes — that allow independent retailers and service providers to fully participate and compete for public sector spending.

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Sales Tax Fairness

Independent brick-and-mortar retailers are at a significant competitive disadvantage by virtue of the fact that they are required to collect state and local sales taxes, while some of their large online competitors are not. Combined state and local sales tax rates range from 6% to 10% in most states and can top 12% in some cities, according to the Tax Foundation.

It’s hard to compete if you have to impose this cost on customers, while your online rivals do not. In fact, a study of the spending patterns of over 2.7 million households by economists at Ohio State University found that this disparity has a significant negative impact on sales at brick-and-mortar businesses.

Ninety percent of the respondents to our 2017 survey of independent retailers said Amazon’s growth is negatively impacting their business, in part because of its ongoing sales tax advantage. Though Amazon is now collecting sales tax on its own direct sales in all the states that have a sales tax, the company is still not collecting tax on sales made by its third-party sellers. These sales account for about half of the spending on its platform. The impact of this lost revenue on city and state budgets is dramatic: a recent report from the American Booksellers Association, an AIB member, and the firm Civic Economics found that uncollected sales tax from Amazon and its third-party sellers totaled between $4 and $5 billion dollars in 2016.

We favor a level playing field in which all retailers — whether they operate online, through a physical location, or both — are subject to the same requirements to collect sales taxes. Allowing remote retailers to skirt their obligation to collect sales taxes gives these companies a significant competitive advantage over brick-and-mortar businesses.

Both Congress and the U.S. Supreme Court have had the power to correct this disparity, and AIB has worked to persuade each to do so. AIB has campaigned for the Marketplace Fairness Act, which passed the Senate in 2013. More recently, in an amicus brief submitted in South Dakota v. Wayfair, Inc., AIB members called on the Supreme Court to reverse its 1992 ruling and give states the authority to require remote sellers with an economic (but not necessarily a physical) presence in the state to collect state and local sales tax.

In June 2018, the Supreme Court issued a decision granting states this authority. AIB has now turned its attention to urging states to exercise this authority by enacting state laws, like the one in South Dakota, that require remote sellers that meet a certain size threshold to collect state and local sales taxes.

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Photo Credits: John Taylor (Senate Antitrust Subcommittee), IntangibleArts (Delivery Truck) via Flickr CC BY 2.0