America was built on promoting economic growth and business in a fashion that ensures fair competition for all. Congress needs to pass the Marketplace Fairness Act so there is real and fair competition reflecting 21st century commerce.
Today, consumers are required to pay a sales tax on their online purchases in all but five states, but states can’t force online retailers to collect it unless they have either a physical store or a warehouse in 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. A recent Ohio State University study estimated that states lose $23 billion a year from uncollected sales taxes on online goods.
The result 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 additional tax. It’s about ensuring all companies pay the same tax, regardless of the type of business.
The tax disparity puts local businesses at a significant economic disadvantage and stifles the economy. A July 2013 study conducted by Arthur B. Laffer and Donna Arduin found that a federal law allowing states to close the online sales tax loophole would result in a more efficient tax system, a larger tax base and lower tax rates for all taxpayers. It would increase the gross domestic product by more than $563 billion and add more than 1.5 million jobs in the next 10 years.
Columbiana Centre is an economic engine and catalyst for growth in Lexington and Richland counties, contributing more than $12.2 million annually in property and sales taxes that pay for critical life-safety services such as law enforcement, fire protection and education. Our retailers employ approximately 900 part- and full-time employees. The Marketplace Fairness Act would allow us and other bricks-and-mortar retailers to compete fairly with online retailers. Bricks-and-mortar retailers are the economic engines that drive the local economy.
The Senate passed this legislation a year ago, and it is currently under consideration in the House of Representatives. Passing it is simply about enforcement of current tax law. Whether you shop at a store or online, taxation should be fair.
General Manager, Columbiana Centre