Congress needs to pass the Marketplace Fairness Act so there is real and fair competition reflecting 21st-century commerce. America was built on promoting economic growth and business in a fashion that ensures fair competition for all.
Today, online-only retailers are not required to charge and collect sales tax, while local businesses must. However, the sales tax (in all but five states) is still owed.
The collection of these taxes is difficult to enforce unless online sellers have either a physical store or a warehouse within the state. When sales tax is not collected at the time of purchase, the burden falls on the consumer to report and pay.
Compliance is virtually non-existent. Based on a recent Ohio State University study, states are estimated to lose $23 billion a year from uncollected sales taxes on online goods.
The current sales tax code is unquestionably confusing for consumers and companies. For example, Amazon is now legally required to collect sales tax in 21 states, including the four most populous: California, New York, Florida and Texas.
The Marketplace Fairness Act is not an additive tax. It’s about ensuring all companies, regardless of the type of business, pay the same tax.
The tax disparity puts local businesses at a significant economic disadvantage and stifles the overall economy. According to a July 2013 study conducted by Arthur B. Laffer and Donna Arduin, federal legislation that would allow states to close the online sales tax loopholes would result in a more efficient tax system, a larger tax base, and lower tax rates for all taxpayers.
This will increase states’ prosperity and employment, increasing GDP by more than $563 billion and adding more than 1.5 million jobs in the next 10 years. It is time for Congress to grant states the ability to correct the unfair application of sales tax laws.
How does the Marketplace Fairness Act impact our community?
- Columbia Mall is a premier shopping destination for Central Missouri.
- Columbia Mall is an economic engine and catalyst for growth in Columbia and Boone County.
- Columbia Mall contributes more than $15 million annually in property and retail sales taxes that pay for critical life-safety services, such as law enforcement, fire department, education and other services.
- Columbia Mall also employs approximately 2,400 part- and full-time employees. The property has a stellar merchandise mix, including Central Missouri’s first H&M opening later this fall.
- Columbia Mall is also part of a Transportation Development District, which is funding a major portion of the Stadium Blvd/I-70 road improvements that occurred last year and are continuing into summer of 2014.
Passage of the Marketplace Fairness Act allows Columbia Mall and other bricks-and-mortar retailers to compete fairly against online retailers. Bricks-and-mortar retailers are one of the economic engines that drive the local economy.
The act passed the Senate in early May 2013 and is currently under consideration in the House of Representatives.
Passing the act simply about enforcement of current tax law. Whether you shop at a store or online, taxation should be fair.
Rusty Strodtman is senior general manager of the Columbia Mall.