One of the aspects of buying over the Internet has been the fact that, as a consumer, you’re getting a discount from what that same item would cost in a brick-and-mortar store.
Georgia imposed an 8 percent sales tax on Internet purchases last year, but is having to negotiate with the granddaddy of Internet retailers — Amazon — to get the business to begin collecting that tax on items sold to Georgia residents.
The governor’s office told Georgia Public Broadcasting last week that Gov. Nathan Deal is optimistic that an agreement can be worked out with Amazon without a court battle. And the conventional thinking is that once the world’s biggest e-retailer agrees to collect those taxes, other smaller Internet businesses will follow suit.
If there’s a sudden willingness for Amazon to agree to this, it’s likely because one of the few bipartisan efforts to arise in the current Congress is legislation introduced last week that is aimed at kickstarting the so-called “the Amazon tax” that has been hanging around the federal Legislature for a number of years now.
“Small businesses and states alike are suffering from the inability to collect due — not new — taxes from purchases made online,” U.S. Steve Womack, R-Ark., told Reuters last week. He described that the legislation is a “bipartisan, bicameral, common-sense solution that promotes states’ rights and levels the playing field for our Main Street businesses.”
Indeed, that is the question here — a level trading field in commerce.
When you go into a business located in your community — whether locally owned or a chain store — you find a place where there is actual stock to look at, pick up and touch. Maintaining that stock of items — clothing, food, electronics and others — is an expense borne by the local business. They have employees, power bills, water bills, maintenance and other expenses that add to their cost of doing business.
What the owners and managers of those businesses are finding is that consumers are using them more and more these days as a showroom.
For instance, if you walk into a store and try on a pair of shoes that cost $60, you can see how the material feels, check out how they look on you and find out exactly what size you need in that particular brand.
If you buy the shoes in Albany, they’re going to run you $64.20. If you order them from an e-retailer that has them at the same price and offers free shipping, you save the $4.20.
That’s not a big deal in a single case, but multiply it by thousands of consumers buying thousands of items and soon you can see where local merchants, local government and state government all miss out on revenue simply because e-retailers have an unfair advantage.
In the span of a decade, according to the U.S. Commerce Department, Internet sales have more than tripled their share of all U.S. retail sales, rising from 1.6 percent to more than 5 percent. Estimates are that states are losing $11 billion a year, a number that will continue to rise.
While we don’t favor new taxes, we do believe that
e-retailers should be held to the same standards as physical stores, whether they’re mom-and-pop businesses or big box stores. Fair is fair.