EDITORIAL: Big box retailers join fight [St. Joseph News-Press, Mo. :: ]
(St. Joseph News-Press (MO) Via Acquire Media NewsEdge) March 13--Who saw this coming?
For several years now, brick-and-mortar Main Street retailers in the Midland Empire and elsewhere have campaigned for tax fairness in competition with e-commerce merchants.
Now they have found some powerful allies in big, national retailers who are experiencing the same pains as small, local ones do.
It turns out anyone who wants to make a go of it by selling goods through traditional storefront locations is at risk. Some of the names lining up behind this message: founders and former and present chief executives of 13 big companies, including Best Buy, Petsmart, The Home Depot and Staples.
The struggles of Best Buy are well-documented as it has seen online retailers undercut its storefront locations on price. Likewise, Staples just announced plans to close 225 stores, in part due to the battle sharpening with online-only competitors.
These companies, calling themselves the Job Creators Network, are campaigning this week for the U.S. House to pass the Marketplace Fairness Act that cleared the U.S. Senate last year. They wrote: "By prohibiting states from requiring online-only retailers to comply with the same sales tax collection rules as those on Main Street, government is, in effect, subsidizing online retail."
This point is better understood when you recognize that every time tax is not collected on an online sale, that means less money is available for funding local schools, improving local roads and providing for local public safety.
The Job Creators Network supports this premise with research from noted economist Arthur Laffer, adviser to the Reagan administration. He argues that allowing states to collect already-owed sales taxes from online sales would allow them to lower overall state tax rates and create more than 1.5 million jobs over the next decade.
As we have noted in the past, equity in tax collections helps local businesses stay in business and keeps goods and services available to local residents, but it does this only by leveling the playing field.
Currently there is no mechanism for collecting these legally obligated taxes on online purchases. Enabling these collections introduces fairness to the equation, and also could ease demands for new local tax revenues.
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