By Wyoming Tribune Eagle
For years, this newspaper has been opposed to taxes on Internet sales. But no more.
After watching business trends in recent years, it has become clear that the failure to tax sales on the Internet is harming local retailers. That is why we now support a bill co-sponsored by U.S. Mike Enzi, R-Wyo., known as the Marketplace Fairness Act. The U.S. Senate voted 74-20 on Tuesday to move the bill up for a final vote.
Those who object to this tax might want to consider what it would be like to be a local retailer in the present competitive environment with tight sales margins. Assume the goods you offer are also available from Internet sellers who can get them to your customers n ever more increasingly n on the same day as they are bought.
What are your options? In Cheyenne, just to level the playing field would require you to cut your margins by 6 percent, the local sales tax rate, since those lower prices are part of what is attracting buyers to the Internet in the first place.
And this doesn’t even take into account the problem of customers who come in, patrol your shelves to see and try out items, and then rush home to buy them on the Internet. Known as “showrooming,” this practice is putting a dent not only in local retailers’ revenues but also in the profits of “big boxes” like Target and Walmart, as well.
Currently, Internet sales taxes are not collected in most states, thanks to a U.S. Supreme Court ruling on catalog sales. It said states only can require firms to collect sales taxes if the companies have a physical presence in the state.
Some who oppose the act assert it is a new tax. Not so. Many states, including Wyoming, require residents to pay taxes on all purchases of goods. That means Wyomingites are supposed to declare and pay taxes on Internet sales. But how many people do you know who do that?
It is estimated that Wyoming is losing some $62 million a year in sales being made on the Internet and through catalogs.
While we have opposed a tax on Internet sales in the past, pressures on the state budget and, more importantly, an altered retail business environment make it a necessity in 2013. We wish Mr. Enzi good luck as he and his supporters seek to move the proposal through Congress.