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WHAT OTHERS SAY: Time to collect taxes on Internet sales

Thursday, May 9, 2013 | 12:20 p.m. CDT

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.


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Comments

John Schultz May 9, 2013 | 10:50 p.m.

Doesn't Missouri's use tax have a floor that must be met before one has to file?

I still don't see how the Senate thinks they can overrule the Supreme Court's Quill decision on mail order companies not having to collect sales tax for states they have no physical presence in, but then I'm not surprised they are charging ahead full on revenue collection.

(Report Comment)
Corey Parks May 10, 2013 | 7:22 a.m.

Market Place Fairness? Where do they come up with these names? OK so they are going to force online stores to charge tax on purchases because the small boutique stores have too. Fine but what is the next bill going to be called that requires online stores to raise their prices to match those of brick and mortar stores?
Anyone that shops online knows that it is not the tax that brings people back to the internet over and over again it is the fact that even if you factor in tax and shipping many items online are still way cheaper then going to a store across town when you factor in price, time, gas...

(Report Comment)
Ellis Smith May 10, 2013 | 8:28 a.m.

& Corey Parks:

I absolutely agree with your second paragraph. One problem is that SOME people want to control everything, and the internet in particular has proven very difficult to control. GREAT!

Requiring online purveyors to collect state sales taxes won't drive established online purveyors out of business or possibly even reduce their volume. It may put some money in the coffers of states but it won't do much for local retailers.

Until I can buy vacuum-packed, roasted coffee beans at Hy-Vee, Starbucks, Lakota or Caribou and I know exectly where the beans came from, who gathered them, and am familiar with their processing, I will buy coffee online and, for no more than I consume, I'll pay what is asked.

(Report Comment)
Michael Williams May 10, 2013 | 9:12 a.m.

Corey/Ellis: Agree. Prices on the net would have to get much higher (including new taxes) before I quit buying; for many purchases, going to a brick&mortar is just too much of a pain in the ass for many items.

I think the brick&mortar folks have been sold a bill of goods on this issue; they've been told (and believe) that if folks have to pay taxes on internet purchases, the playing field will be leveled and customers will return. I think that reasoning is faulty; the only REAL effect will be increased taxes to the state and the B&Ms will end up sorely disappointed and perhaps even feeling used because their support was "bought" with the promise of better prosperity and more customers. They fail to understand human psychology and how decisions are made when "easier" choices are at hand.

B&Ms have to entice and make me happy, make me turn away from other things I want to do, go to their store, fight traffic, worry whether I got photographed by traffic cameras, find a parking place (downtown....ugh), fight off innumerable requests of "How may I help you?" (once is enuf...after that, I'll find you), and constant decisions of whether this is credit or debit PLUS remember the gawddamned password. Then carry the crap to the car, fight traffic, unload at the house, and take a nap.

Quite frankly, I'd rather be chopping wood or pruning trees or hoeing the garden while waiting for my doorbell to ring that "USP is here!" Then, I only have to decide how to dispose of the empty box.

The ultimate future of B&Ms is probably only as shipping warehouses, liquor/entertainment/eating establishments, and specialty stores with a variety of stuff that I can pick up in one fell swoop (hardware comes to mind).

(Report Comment)
Ellis Smith May 10, 2013 | 10:49 a.m.

There will continue to be business for good B&Ms, who have business sense, understand their local market and their customers' needs, and that won't just be branches of big chains.

I can't resist, Michael (by now you should know that). You may be old enough to remember the product HADACOL (sp?); heavily advertized on radio soon after WWII. (Its run ended when the feds discovered how much alcohol it contained. Of course users felt better!)

Disc jockeys of that era did perodies of product ads:

"B'fore my wife Hortense tried HADACOL she was tired and sickly; she couldn't even git out an' HOE in her garden.

But since she tried HADACOL she's out there ever' day just a hoein' away in her garden. Now she's known as the best HOE-ER in town." :)

(Report Comment)
Michael Williams May 10, 2013 | 10:55 a.m.

Speaking of taxes...from the AP and the "other" newspaper:

http://hosted.ap.org/dynamic/stories/U/U...

PS: Perhaps TonyB's exasperation with right-wing paranoia is partially answered by this. Plus, I await the left's (and his and Rosman's and Kennedy's) PUBLIC hue and cry over how wrong this is.........

Yes....I'm baiting.

For a reason.

(Report Comment)
Ellis Smith May 10, 2013 | 12:10 p.m.

Michael:

You probably won't get your wish; you will be ignored. For them to mount a response they would need to first have their version of a "level" playing field, meaning there wouldn't and couldn't be room on that field for anyone or anything else.

"We want everything to be our way. Waaaaa! Waaaaa!"

From reading the Dr. Spock books and having raised a child I am aware, as I'm sure you are too, that it is normal for small children of a certain age to manifest similar behavior, but - fortunately - most of them grow out of it. Still, the number of those that fail to do so is more than a little worrisome.

[Is Smith also baiting?]

(Report Comment)

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