ALEXANDRIA, Va. — The National Association of Chain Drug stores has endorsed sales tax legislation designed to remedy what it calls a competitive disadvantage for brick-and-mortar retailers versus Internet merchants and catalog retailers.

NACDS late Thursday said it has sent a letter of support to Sen. Mike Enzi (R., Wyo.), sponsor of the Marketplace Fairness Act, which would enable states to collect sales taxes from out-of-state businesses instead of relying on consumers to pay those taxes, as in the current system.

"For too long, remote Internet retailers have enjoyed an unfair and competitive advantage over local brick-and-mortar retail establishments. Online-only companies can achieve as much as a 10% price advantage over brick-and-mortar retailers by not collecting state sales taxes," NACDS stated in the letter to Enzi, the ranking Republican on the Senate Committee on Health, Education, Labor and Pensions.

"This not only hurts local businesses, it robs state governments of vital tax revenue," the association noted. "It is estimated that states lose $23 billion annually in uncollected sales taxes, a figure that is sure to grow as Internet commerce expands."

Earlier this month, NACDS and other retail industry groups in a letter urged the Joint Select Committee on Deficit Reduction, known as the "super committee," to close the loophole that prohibits states from requiring remote sellers to collect sales and use taxes owed on purchases from out-of-state vendors. The letter was signed by about 70 national and state retail organizations and more than 60 retailers and other companies.

In its message to Enzi, NACDS pointed out that state budgets are already grappling with financial shortfalls and that the sales tax loophole ties their hands in revenue collection.

"At a time when state governments are struggling to fund important public health and safety functions — including Medicaid health benefits for low income citizens — it is vitally important to give states all the tools they need to collect revenue they are owed," NACDS said in the letter. "Your legislation is a strong step in that direction."