Missouri merchants want to level the playing field with online retailers

Friday, October 28, 2011 | 4:48 p.m. CDT

JOPLIN — When John Davidson and his wife, Susie, bought Changing Hands Book Shoppe and Game Store, 528 S. Virginia Ave., 19 years ago, there wasn't an or an

But for Davidson and other bricks-and-mortar retailers across the country, competition with online retailers has become a way of life.

"I see it every day," Davidson said. "There are some people out there who think I'm Amazon's showroom. They come in, they fumble the product and they go back and order it, or they sit there on the phone and order it in front of me. It definitely has an effect."

Davidson said he doesn't oppose online competition, but isn't happy with the fact that those online businesses have an edge — they aren't required to collect sales taxes from their customers, as he is. That means that he has to charge customers 7.824 percent more, giving an edge in price.

Davidson said his store does sell some products online, but it's usually just to get rid of "dead stock," and he believes requiring Internet retailers to collect the tax could help his business.

"I don't know that it would give us an influx of business, but I would say that it would stop the slide," he said. "It would prevent more people from bypassing us to go online to buy things because that price differential would be somewhat offset."

Davidson might get his wish.

A proposal called the Main Street Fairness Act, introduced by U.S. Sen. Dick Durbin, D-Ill., aims to "level the playing field" between online and bricks-and-mortar merchants by allowing states to require Internet companies to collect sales taxes, regardless of whether the seller has a physical presence in the state.

U.S. Sen. Roy Blunt, R-Mo., declined to comment but U.S. Sen. Claire McCaskill, through her spokesman, John LaBombard, said that while the issue deserves consideration, the decision about whether to require Internet companies to collect sales tax "will have to be resolved by the Missouri Legislature."

Davidson said he doesn't like taxes, but this is an issue of fairness.

For his business to compete, Davidson said he and his wife focus on building personal relationships with customers and offering a place for people to play games on Wednesdays and Fridays.

Davidson said he's had people ask him if he'll match prices for items they've found online, which he said he generally won't do. He believes the pressure from big-box retailers and struggling states and cities will eventually compel online retailers to begin collecting sales tax.

"It gives an Internet retailer from outside Missouri an advantage over me with customers because they have about a 7.5 percent advantage in actual cost to consumers with that," Davidson said. "That more or less offsets any disadvantage they have with paying shipping costs depending on the size and cost of the item. Amazon is the largest book retailer in the world, and it's similar to the effect that Wal-Mart and Target had on Main Street."

Leslie Jones, finance director for the city of Joplin, said all municipalities realize the potential for increased revenue.

"We talk about it at municipal accounting conferences, but until somebody moves off center, we can't as a city do anything."

Jones said that while it may appear to be a state issue, federal action may be required to get it resolved.

"It's very difficult to get anything done with such a big issue," she said.

Bob Wolfe, owner of Always Buying Books, 5357 N. Main St., said he opposes a sales tax for online retailers.

"I do sell things online and even if I didn't I would be opposed to it — I would be opposed to any additional taxes, period," Wolfe said. "It would just give the government more money to waste. I'm not in favor of anyone paying more taxes for anything ... They've proven they can't handle it. It goes from villages to the federal government."

Wolfe said he sells a small percentage of his books online and that a few years ago, he was doing an average of $40,000 a year with online sales but stopped because he had to claim that income on his taxes. He said he has around 50,000 books in stock and that Internet retailers haven't affected his business.

"I could close the store down and start selling books online and make more money, but I just enjoy being here, and this is the source of where my books are now," Wolfe said.

Chris Keller, manager for Comeau Jewelry Co., said his business hasn't been directly affected by Internet sales, even though major online retailers such as also sell jewelry, but he believes Internet retailers should have to collect sales tax.

"Every other bricks-and-mortar store has to; why shouldn't they?" he said. "I'm sure it couldn't hurt because there's a lot of business done on the Internet, and I'm sure that would generate a lot of extra dollars for our government and economy."

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