Very quietly, the Senate introduced a bill which would implement collection of state 
sales taxes on product sales made over the internet on April 16th, S.743. It can be found at the senate web site:: This Bill is called the Marketplace Fairness Act of 2013 with 29 sponsors is predicted to pass the Senate today and has been introduced in the House. The arguments for this act seem to come from people who think that the lack of sales taxes added to product sales over the internet gives internet retailers an unfair advantage over local brick and mortar stores.
South Dakota Gov. Dennis Daugaard, a Republican, called it a “matter of equity and fairness.”
“The same people who are selling the same products should be paying the same taxes.” There are states in which there are no state sales taxes, New Hampshire, Montana, Oregon, and Delaware. Yet Delaware’s senators are supporting this bill! Is this really a matter of fairness or just another tax grab?
What do people buy through internet sales? Is this really competing for market share with local businesses? Does this affect chain stores like Wal-Mart and Best Buy more than small business and boutique shops? Who will benefit, and who will lose if this bill becomes law?
Personally, shopping on the internet is used to find goods not locally available. It is also used to educate on price ranges for goods that may be found locally. In addition, most goods purchased over the internet are sold with shipping costs which makes up for the lack of sales taxes being added to the total cost of goods sold. Often, the shipping costs are the same as the state sales tax would be. It seems unlikely that internet sales benefits greatly from the lack of sales taxes being charged.
Chain stores, like Wal-Mart and Best Buy presently have all but driven local smaller retailers out of business when they open in a community. In addition, they have websites which list many products available for consumer delivery that are not locally stocked. They charge state sales tax on all purchases since they have stores in all states. They can buy product in quantities, and therefore benefit from their size to be able to buy lower and compete over the internet even charging sales tax. They can avoid shipping charges as they will deliver internet purchased goods along with regular shipments to their stores at no additional shipping costs to them. It would seem to me that this adds to their competitive advantage over smaller retailers.
The winners in this event would appear to be the states and local communities who cannot collect sales taxes on goods sold over the internet. However, when these taxes are collected from consumers the consumers are paying more for goods than they will be paying for goods purchased by mail or phone order from companies in states other than those in which they live. It would appear that state and local governments and big business will be the beneficiaries of this tax grab and consumers and small business will be the losers if this legislation goes through. It is time to write to senators and to congressmen to change their minds. Apparently over 72 senators favor this bill. Yours may be one of them.
