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Online retailers have unfair advantage

computer-620While I understand that things move slowly in Washington, D.C., I simply don’t understand why it’s taken more than 20 years for Congress to take action to help America’s local businesses.

I’m talking about the unfair advantage online-only retailers have over the small businesses lining our main streets.  By not requiring online-only businesses to collect our state’s sales tax, Congress subsidizes them, placing their interests above local small businesses. As a result, more of our Main Street shops are cutting back or shuttering their doors.

I just don’t see why anyone would think it’s acceptable to hold similar businesses to different tax requirements when the only difference between them is whether they operate online or out of a brick-and-mortar storefront. That flies in the face of the free-market system upon which our great nation was built.  It’s the government picking winners and losers, plain and simple.

No one wants to pay sales taxes — and no business really wants to have to collect them.  But if we’re going to require one business to collect them, then we must require all businesses to do the same.  It’s only fair.

The Senate already passed e-fairness legislation by way of the Marketplace Fairness Act last year. It’s the right solution because it levels the playing field for businesses and it ensures the sales taxes paid by consumers benefit the communities where they live.  It’s time for the House to show they also support the local businesses by passing e-fairness legislation once and for all.

 — Robert Wist lives in Tempe.

3 comments

  1. How is it fair that as a business located in Iowa we would be forced to collect Tempe, AZ sales taxes and remit said taxes back to AZ where I have no vote in any part of AZ government and no voting rights but you keep telling your self its fairness. What is stopping you from selling your products online, that right nothing. Your idea of fairness is make my business a unpaid unrepresented tax collector for the whole country and liable to all 10,000 sales tax codes in 46 states. Boy does that sound just so fair. Where as your local store one has one tax code and remits one return has one audit. We are also not looking forward to possible audits from 46 State plus DC and all 500 Native American tribes. So think again if you believe that this law MFA = Fairness.

  2. Proponents of this bill say it will be easy. REALLY? Have they ever tried to integrate tax software into a customized shopping cart? LOL!! Like “OBAMACARE“ easy? Even if we take them at their word “only one state tax rate” and “perfect running software to calculate”, HOW DO PAYMENTS GET REMITTED to all 46 states? Do we write 46 monthly checks? Fill out 46 separate monthly sales tax returns?

    NO ONE CAN HONESTLY ANSWER THIS QUESTION BECAUSE THEY DID NOT STUDY THE APPLICATION OF THIS LEGISLATION BEFORE RUSHING IT THROUGH THE SENATE.

    Not all small merchants are order automated and to input additional information by hand is
    both time consuming and interferes with normal business operations. What about audit risk? Can the tax board in Tennessee come after a merchant in Florida? Is it moral to burden an out of state merchant to collect taxes on behalf of a state they don’t live or work or vote in? Why not ask China or Mexico to collect Tennessee taxes? Is this constitutional? Will surely be challenged in the courts, but why this legislation is truly harmful is that in such a weak recovery (check labor participation rate, wage growth, hours worked, etc.) you are burdening the very small businesses that are one of the only sources of growth in our economy. Hiring in this sector will freeze or decline and companies that are mobile and of large enough scale will simply move offshore. Our tax code is already written in a manner that encourages large companies to domicile offshore, this legislation encourages the medium and even portable smaller sized USA businesses to join them in order to compete with websites that won’t have to collect this tax in the Caribbean, Mexico, Canada, etc.

    The tax revenue collected will come right out of the pockets of the average American family and the extra $$$ our citizens will have to pay means LESS money in their pockets to spend locally.

    In terms of “Fairness”, there is zero entry barrier for any brick and mortar retailer to sell their products online.

    HOW ABOUT AN OPT OUT OPTION? We agree not to ship to states that want us to collect sales tax and then we are not forced to multiple file and take the audit risk? One million dollars of revenue does not make you a big business…….at a 5% profit (small margins are common online) you are making a whopping $50K of gross profit annually……this will ensnare and burden a TON of small businesses if passed in its current configuration.

  3. Robert, your conclusion comes from a twisted and misleading plethora of thoughts that fail to include a large number of differentiating items and facts. Online businesses may provide some similar products, but the businesses are not similar at all. The taxes paid by the local business are used to provide city, county and state services like fire and police protection, water and sewer services, local school funding, and a myriad of other government services. The out of state businesses are taxed there to provide the same local services to those companies. There is no reason that they should be double taxed simply because they have set up a more efficient model to provide the merchandise to the consumer.

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