Shopping on a computer is seductively simple — and chances are good you won’t pay state or local sales taxes on many purchases.
That’s welcome news for companies selling on the Internet as well as for many of their customers.
But it’s not fair to brick-and-mortar stores that have to charge the taxes, potentially making them look more expensive for customers. And it’s unfair to states, cities and other taxing jurisdictions that depend on sales taxes to help finance and deliver public services.
Finally, after years of complaints from taxing entities and thousands of retailers, Congress has taken a strong step toward fair taxation of online sales.
The U.S. Senate on Monday passed a bill allowing all states to legally collect sales taxes on Internet purchases. The measure faces an uncertain future in the more conservative House, but it deserves approval there this year.
The bill has been on ice for years in the nation’s capital. It’s been the hostage of various lobbying groups and some lawmakers who claimed it would allow tax increases on consumers.
However, many states — including Missouri — already require customers to pay sales taxes for online and catalog purchases. But it often doesn’t happen because buyers don’t know how to easily do that, and online retailers don’t have much incentive to collect the taxes.
Proponents of this year’s Marketplace Fairness Act contend that taxing online sales could reap $23 billion annually in added revenue, to be invested in education, public safety, roads and other public assets. A study a few years ago estimated that Missouri was missing out on $210 million a year in online taxes.
But not everyone’s happy about the extra money raised through the tax. Some GOP House lawmakers, in particular, claim the bill would just be another burden on American consumers.
In reality, it would allow far more efficient collection of taxes already owed to states and others. Right now, most Internet customers are unknowing scofflaws, not paying their fair share of taxes.
With passage of this measure, states would have more powers to make sure all businesses collect taxes that, after all, have been approved by votes of the people or elected officials.
Online merchants need to be responsible merchants, too, and this law would require them to be just that.
Copyright The Kansas City Star. Reprinted with permission.