By NEMS Daily Journal
Gov. Haley Barbour’s support of a proposed federal law that would tax Internet sales the same as retail sales at bricks-and-mortar locations in all the states reflects growing concern about the tilted playing field created by a Supreme Court decision that states cannot require sales tax collections on Internet orders.
Barbour, a strongly anti-tax Republican, clearly understands that not collecting state sales taxes on Internet sales (except if the company has a physical location in Mississippi) places Mississippi retailers at an unfair price disadvantage with firms whose sales contribute nothing to our state’s economy.
His support for the federal law reflects a change in his position. He opposed a mandatory Internet tax collection when the businesses were in their infancy. He said in a Bloomberg News story, “Today, 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 the states’ sales tax laws.”
Retailers make nothing off collecting sales taxes. It’s required by law for all 33,000 retail stores in Mississippi, including the national chain operations.
Retail employs 250,000 people, with a total retail employment impact reaching 346,000. The total retail-related income impact in Mississippi is $9.77 billion.
The importance of retail is unquestioned: One in four Mississippi jobs is related to it, the nationwide accounting firm PriceWaterhouseCoopers reported in August of this year.
Republican Sens. Lamar Alexander of Tennessee and Mike Enzio of Wyoming are chief sponsors of the Marketplace Fairness Act.
Opponents say passage would threaten tens of thousands of e-commerce related jobs, but that’s speculative.
Not taxing e-commerce unquestionably undermines the 14.4 million people employed in retail nationwide because the tax “exemption” is the equivalent of a mandated advantage for the Internet-driven businesses generally operating from a few locations.
The National Conference of State Legislatures estimates that Mississippi and its local governments will lose more than $300 million in 2012 because Internet retailers do not collect the state’s 7 percent sales tax.
We agree with collection advocates who say computer technology has improved to the point that collections would not be a technology problem.
A boost of $300 million in Mississippi’s sales tax collections would amount to a 10 percent increase, a potentially critical amount during a period when federal revenues for the states are expected to plummet.