By NEMS Daily Journal
The U.S. Senate’s passage Tuesday of legislation empowering all states to collect sales taxes for online purchases by residents sets the stage for restoring the balance in business transactions between local retailers and distant online retailers, plus providing much needed revenue for Mississippi and many other states.
Mississippi’s U.S. senators, Republicans Thad Cochran and Roger Wicker, joined 67 of their colleagues in the bipartisan vote for the Marketplace Fairness Act.
U.S. Rep. Alan Nunnelee, R-Tupelo, said through a spokesman he is undecided about how he will vote when the measure comes up in the House, but we encourage him to join fellow Republicans Wicker and Cochran, former Gov. Haley Barbour, and a growing number of his former colleagues in the Mississippi Legislature in support of the bill.
This is the situation:
• Sales tax collection from Internet vendors isn’t required unless a company has a physical presence in Mississippi (that regulation rises from a U.S. Supreme Court ruling). The household wares and gifts retailer Williams-Sonoma, for example, has a major online shopping presence, but it also has a retail store in Jackson, so online orders should include sales tax, but might not, as has been noted generally about online collections.
• House wares and gifts retailers locally owned in Mississippi, on the other hand, must collect a 7 percent sales tax on every purchase, placing them in many customers’ eyes, at an automatic price disadvantage.
• Mississippians are supposed to pay a use tax on the purchases from out of state in lieu of a sales tax, but in reality it is virtually never collected.
• Mississippi misses out on about $303.2 million in revenue because of the sales tax collection gap.
Most online retailers don’t employ Mississippians and don’t make commitments to the betterment of communities.
Mississippi’s locally owned retailers often are in the vanguard of civic activism, have owners and employees who are community leaders and reinvest themselves in our state.
Barbour, in a 2011 letter to congressional sponsors of the legislation, made a persuasive case:
“E-commerce has grown, and there is simply no longer a compelling reason for government to continue giving online retailers special treatment over small businesses who reside on the main streets across Mississippi and the country,” Barbour wrote.
“The time to level the playing field is now, as there are no effective barriers to complying with states’ tax laws.”