Not only is this unfair competition for local business; it deprives public agencies of substantial sales tax revenue.
The competition factor has a large ripple effect. When local retailing operations diminish, jobs are lost and companies don't spend as much for everything in the local economy from site costs to advertising.
One can't whine about competition itself. Many customers like shopping online, and companies push those sales right along with sales in their stores. But unfair competition is something else, particularly when provided through unequal taxation.
The loss of local sales tax revenues is a serious problem. Ask any officials whose agency relies on this source of revenue. When sales tax revenue declines, local citizens must pay the price, either in diminished services or increased taxes.
When politicians suggest taxing online sales, pushback occurs from people prospering from the online industry and from a naturally shortsighted public. And devising a sales tax collection system for wild and woolly Internet sales is more challenging than those occurring in an identifiable physical location.
But tax equity is important, and with today's technology devising a collection system surely is possible.
The system would have to be national in scope with online retailers required to collect a tax from all buyers for remission to the national tax collecting authority. Tax rates could reflect the origin of the buyer for all domestic residents and would be forwarded to respective states for redistribution locally, just as is done now.
Those living outside the United States should pay an average tax rate that would be used federally. When a French citizen walks into a local Wal-Mart, a local sales tax is charged. It's the sale that's being assessed, not the nationality of the buyer.
State and local sales taxes average 7 percent or so. This is too much of a competitive advantage to give to Internet sellers over local shops. Even when the sellers are the same companies, the disadvantage for local tax-collecting governments is wrong. Let's try to fix it.
Henry J. Waters III, Publisher, Columbia Daily Tribune
Before you criticize someone, walk a mile in his shoes. Then when you do criticize, you'll be a mile away and have his shoes.
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