The Free Press, Mankato, MN

Editorials

May 7, 2013

Online retail should be paying taxes

As Internet sales have soared in recent years, many online retailers and consumers have enjoyed a whopping subsidy — worth about $23 billion per year. The handout comes via the lack of sales tax applied to purchases from online retailers who don’t have a physical presence in the state they’re shipping to.

The president and a majority of senators are finally taking a serious look at legislation that would allow — but not force — states to collect sales tax on out-of-state Internet sales to their residents. It’s legislation worthy of approval.

Brick and mortar retailers, including giants such as Wal-Mart, support the sales tax. They’ve long argued they are at a disadvantage as shoppers browse their stores to look at and hold products but then go online to buy them from other sources to avoid the sales tax. (Technically, consumers are supposed to voluntarily pay the sales tax when they file their returns, but with enforcement nearly impossible almost no one does.)

But it’s not just stores with buildings that support the online sales tax. Internet giant Amazon, for example, backs the legislation.

Opponents of online sales tax collections argue it would put smaller online retailers at a competitive disadvantage because they wouldn’t have the resources to track and apply the various different state sales taxes. But portraying this debate as one of big corporations against small businesses is misleading. Retailers with less than $1 million in annual sales would be exempt from sales taxes. Under the legislation states would be required to simplify their tax system before requiring out-of-state retailers to collect it, and common software can easily keep track of the various state tax rates.

Finally, the bill would not require states to collect the tax. Those states that have no sales tax could continue to ignore sales tax collections for their residents.

The sales tax exemption for online retailers made sense when the industry was in its infancy. But with online sales at $225 billion a year — accounting for more than 5 percent of all retail sales in the nation — the argument loses its impact. For the sake of fairness and to provide states with sales tax revenue they should be receiving, Congress should pass the legislation.

1
Text Only | Photo Reprints
Editorials
  • Spear smile.jpg Spear column: Hoffner case tested first and right rules

    The biggest news stories carry the biggest risk

    April 20, 2014 1 Photo

  • SCC leads the way on work ed The importance of higher education has never been more pronounced than with the changes occurring in our economy, especially in manufacturing. Bloomberg News noted that manufacturing accounts for 80 percent of our exports and for every one high-tech

    April 20, 2014

  • Our View: Y helps kids with skatepark Thumbs up to the YMCA and supporters working quickly to open an interim roller sport park. When fire destroyed Chesley Roller Sports Park in February, the Y made the commitment to rebuild it this summer and fall. But the Y also moved to give skateboa

    April 19, 2014

  • Our View: Make course evaluations public There's been a considerable and legitimate debate over the years about whether students at a public university should have access to teacher and course evaluations. Whenever there is a legitimate debate, it's hard to be in favor of less information a

    April 18, 2014

  • Our View: Drawing the line after Ukraine Why it matters: Tensions are ramping up once more as Russia tries to dictate to Ukraine.

    April 17, 2014

  • Our View: Costs key in health care access While more uninsured got coverage, costs must be controlled to sustain programs

    April 16, 2014

  • Our View: Saving lives trumps booking drug users Changes to the drug laws would save lives of those who overdose

    April 15, 2014

  • Pay attention! Distraction a problem A few years ago safety experts focused heavily on the dangers of people talking on cellphones while driving. Some states passed laws prohibiting the use of hand-held phones in cars as a result. Today much attention is on motorists typing on tiny hand

    April 14, 2014

  • DEBATE MEDICAL MARIJUANA When Minnesota lawmakers return from their spring break, one of the issues they may face is medical marijuana. This has been kicked around too many times. We feel it deserves to be pushed from committee and debated on the floor. The issue has been tr

    April 13, 2014

  • Our View: Cities saved on garbage collection Mankato and North Mankato saved their taxpayers money by bidding on garbage service

    April 12, 2014