This week the U.S. Senate is expected to approve the Marketplace Fairness Act, which will force online retailers to charge state sales taxes.
While the most un-compromising, no-new tax advocates, including North Georgia Congressman Tom Graves, are opposed to this, conservatives with common sense are supportive, realizing this is about leveling the playing field between online retailers and Main Street businesses.
Graves released a statement saying that “States that want their businesses to be more competitive in the marketplace should engage in a race to the lowest tax rate rather than seek to level the playing field by imposing higher taxes and new burdens on competitors and consumers.”
In theory, Mr. Graves’ sentiment is great, reduce taxes. But in practice we’d ask how are states supposed to fund schools, roads and prisons? One day we might be able to do away with our own state sales tax, but until then, we advocate for seeing that Main Street businesses are treated fairly.
From our position at the Progress on Jasper's Main Street we can't see any reason that Amazon.com with its billions in revenue shouldn't pay the same taxes as Jasper Drug Store or Coco's Cottage.
Originally internet retailers were let out of collecting sales taxes in states where they didn't have a building by a 1992 Supreme Court ruling. The sentiment at the time was this perk to online businesses would foster growth in e-commerce (obviously this worked) and also that internet retailers wouldn’t have to pony up to maintain schools and roadways in places where they don't have any physical presence.
But a lot has changed since then. Now, it's the businesses with brick and mortar that need a boost. For higher-ticket retail items people are aware you can go to a store, test a $500 item, get advice from a salesman face-to-face, then go home and order it online to save 4 percent by not paying (Georgia) sales tax. It really isn't fair.
A lot of online businesses offer extremely low prices. In addition to not charging sales tax, they cut costs by not employing our neighbors here in Pickens County, nor do they support social groups, church choir trips, youth sports or give out candy to kids at Halloween. They do lobby in Washington, however, which may explain the warmer feelings regarding them by lawmakers.
Not only do we encourage our congressional members to support making these online companies pay the sales tax, we also encourage our readers supporting local businesses directly, by considering all the advantages they offer us in Pickens County, Georgia -- even if a cheaper price can be found online.
Requiring these online businesses to pay sales tax would have an immediate positive impact.
State funds coming to local school systems and for local paving have dried up. Seeing that the dot-coms pay their share of the sales tax provides a new source of state revenue, which might save a teacher's job and help keep our county property taxes down.
Differing estimates say that the internet sales tax could generate between $11 billion to $23 billion a year –divided among the states based on their residents’ purchases and tax rate.
Three arguments are generally lobbed against requiring online businesses to pay:
• First it's a new tax and people don't want any new tax -- Not true. The sales tax already exists. This just makes sure everyone pays their share.
• It will be too hard for online businesses to figure out how to charge it. Again, not true. First, businesses that generate less than $1 million a year in online sales are exempt. So it will have no effect on anyone selling a bass boat on Craigslist.
And if a company can figure out how to sell more than $1 million a year online, it can figure this out.
• Finally, it's not going to be popular with the people – likely true among online shoppers. But this is a case of supporting communities and fairness.