Our Opinion: Tax Internet sales; correct fundamental inequity
Wednesday, January 18, 2012
Issues of taxation being debated at the national, state and local levels invariably focus on the fundamental question: What is fair?
Sales taxes collected by local merchants but not by online vendors exemplifies unfairness.
We agree with the local merchants who believe this inequity is unjust and places them at a competitive disadvantage.
Proposals have been advanced at both the state and national levels to require Internet merchants to collect established sales taxes.
Opponents contend this would constitute a new tax, which some — largely Republicans — have pledged to fight.
Proponents disagree. They say the tax exists, but isn’t collected uniformly.
Proposals addressing the inequity of sales tax collections are expected to be filed in the state Legislature, including one planned by Rep. Mary Still, D-Columbia.
She estimated Missouri revenues would increase by $20 million in the first year of online sales tax collections.
In Congress, U.S. Sen. Roy Blunt, a Republican, is cosponsor of the Marketplace Fairness Act, which would allow states to collect sales taxes owed to them from online retailers.
“Let’s face it,” Blunt said, “people often go to their neighborhood store to ‘try on’ the wedding dress or look at the new power tools and then buy the same products online. If the major difference in the price was the sales tax — which the local merchant does not keep — that’s not fair.”
Retailers — and some elected officials — also point out that local merchants bolster the economy and donate to community activities.
Those observations are accurate, but our quarrel centers on the fundamental inequity.
Local merchants fulfill their legal obligation to collect and pass on sales taxes to state and local governments. Their competitors are under no such obligation.
That is a fundamental unfairness — one that is tantamount to government designating a category of tax collectors and then punishing them with competitive disadvantage.
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