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EDITORIAL: Time to tax online sales [Sun Journal, Lewiston, Maine]
[December 01, 2009]

EDITORIAL: Time to tax online sales [Sun Journal, Lewiston, Maine]


(Sun Journal (Lewiston, ME) Via Acquire Media NewsEdge) Dec. 1--We hope you had a jolly Cyber Monday yesterday, meaning you got all your online Christmas shopping done before your boss canned you for misusing company equipment and wasting time.



Cyber Monday is, for the uninitiated, the day millions of office workers return to work still possessed by Black Friday shopping fever. Finally freed from coma-inducing dial-up service at home, they use their employer's high-speed access to knock some names off the Christmas list.

Worse, online retailers are now offering special Cyber Monday discounts designed to further encourage cubicle workers to ignore their work and spend their money.


We have, of course, nothing against online and telephone retailers. One of the best in the land, L.L. Bean, is headquartered here.

But we continue to object to the unfair advantage online retailers enjoy over their traditional Main Street brethren.

While the local person running a shoe store or gift shop must charge a 5 percent tax at the point of sale, out-of-state e-retailers need not.

So, if you live in Vermont and order a cozy pair of double-soled, shearling-lined, leather slippers from L.L. Bean, you will pay no sales tax. Unless, of course, you are exceedingly honest and voluntarily agree to pay online tax at the end of the year with your income taxes.

If you live in Maine and order that same pair of slippers online, you pay the 5 percent at the time of purchase, no choice about it, just because L.L. Bean has a store here.

A foolish inconsistency, we say.

Here's the problem: online sales are growing by leaps and bounds year after year. Traditional store sales are not. Ultimately, if the trend continues, state governments will lose bigger and bigger slices of their sales tax revenue That affects the services offered to a state's residents and, potentially, the other taxes they pay.

As states around the U.S. struggle to fund operations, we can't believe more are not thinking of ways to close this expensive and unfair tax loophole.

The original argument was that the Web retailing was new and it needed a sales-tax exemption to grow. Obviously, growth is no longer a problem.

The other reason? It was thought too difficult for big online retailers to comply with 50 individual state sales tax laws.

Certainly, computer programs can be designed to look at the address on a charge or debit card, know the state law and apply the right tax to the right product.

Ultimately, though, raising revenue for hard-pressed state governments isn't the main issue here.

It's about fairness. There is no reason giant online retailers like Amazon.com, Dell and Borders should enjoy a built-in tax advantage over local merchants struggling to compete.

To see more of the Sun Journal or to subscribe to the newspaper, go to http://www.sunjournal.com.

Copyright (c) 2009, Sun Journal, Lewiston, Maine Distributed by McClatchy-Tribune Information Services.

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