But buying goods from online retailers remains a powerful tug, often because of product selection and potential savings.
The Internet, however, enjoys an unfair advantage over brick-and-mortar businesses. Companies aren’t forced to collect state sales taxes on items they sell online. While we believe in the free market and consumer choice, we also believe in a level playing field.
For that reason, we hope Georgia Sens. Johnny Isakson and Saxby Chambliss support legislation spearheaded by U.S. Sen. Dick Durbin, an Illinois Democrat.
Mr. Durbin is pushing a bill, which is gaining bipartisan support, called the Marketplace Fairness Act. It would require companies with more than $500,000 in annual online sales to collect sales taxes. Such a measure won’t cripple mom-and-pop, start-up businesses that sell their products on the Internet. But at the same time, it forces the bigger Internet players to follow the same rules as every business on Broughton Street or inside the Oglethorpe Mall.
To its credit, online retail giant Amazon offers “strong support” for Mr. Durbin’s bill. Perhaps it sees the handwriting on the wall. If it doesn’t concede a little bit now, it could face something less palatable later.
But eBay opposes it. That’s odd, since it’s hard to believe that many eBay sellers move more than a half-million dollars worth of products each year.
No one likes forking over more money in taxes at the cash register. That’s why tax-free holidays are so popular with consumers and merchants, even though they cost the states revenue.
But every day is a tax-free holiday on the Internet. And while some individual states have tried to impose and collect taxes on online sales, they’ve largely been a flop. Thus the best way to fix things is with a federal law.
State governments report losing nearly $10 billion a year in sales taxes that aren’t collected on online purchases. That’s a huge number. But what’s not calculated is the amount of business that local merchants have lost.
Mr. Durbin’s bill offers leeway to states in setting their own rules to streamline and simplify the tax collection process. It won’t be a case of Washington barking all the orders. That’s wise. What works in Georgia may not work in Illinois.
Interstate commerce is a federal concern. Since the Internet has dramatically changed the nature of commerce, a federal solution seems sensible. And fair. Buying local or online should remain a matter of individual choice. But paying the required taxes shouldn’t be.