Editorials Nationwide Call for Sales Tax Fairness

As the U.S. Congress headed back to work in September following its August recess, sales tax fairness once again became a hot topic. Along with myriad reports that Amazon.com finally began collecting sales tax for online sales in Pennsylvania and California, a number of newspapers nationwide published op-eds and editorials calling on Congress to pass sales tax fairness legislation. Here’s a look at a few editorials of note.

The Birmingham Press-Register [1]  editorial page stressed that the Marketplace Fairness Act (S.1832), a bill that would allow states to require online retailers to collect and remit sales tax if they choose, “deserves the support of Alabama’s entire congressional delegation.

“The proposal now before Congress would not create a new tax, even though it could result in new tax revenues for many states,” the editorial continued. “Rather, it’s a matter of closing a loophole that has needed addressing for a long time…. [S]tates can no longer afford to forgo the sales tax on those purchases, especially during a down economy.” In conclusion, the Press-Register urged: “Thus, the measure deserves swift passage.”

An op-ed published in Sioux Falls, South Dakota’s Argus Leader [2] by Shawn Lyons, the executive director of the South Dakota Retailers Association, noted: “Internet-only retailers have been able to fly under the radar, not collecting state sales taxes by claiming they do not have a physical presence in most states. This gives retailers as much as a 10 percent price advantage over Main Street businesses….

“There is simply no longer a reason why Internet-only retailers should be held to a different standard than all other businesses.”

Lyons stressed: “We need Congress to level the playing field and restore fairness to the retail marketplace. Luckily they can do just that by passing e-fairness legislation, such as the Marketplace Fairness and Marketplace Equity Acts. Passing such legislation would allow states — but not force them — to require online-only businesses to collect their sales tax just like every other business in the state.”

A day after Amazon.com began collecting and remitting sales tax to the state of California, the San Gabriel Valley Tribune [3] editorial page called the action “a victory more than a decade in the making for local brick-and-mortar shop owners, who for years have been educating consumers about products they later buy online to avoid paying sales tax. For California and its cities and counties, the reward will be $300 million in new revenue to help close the chronic budget deficit that forces service cuts each year.”

The editorial concluded: “California stood up for local businesses and struck a deal that’s fair to everyone. In today’s my-way-or-the-highway political environment, it’s a refreshing reminder of the way government used to work.”

In its “Opinion” column, the Norman Transcript [4] in Norman, Oklahoma, said of the current sales tax inequity, that “besides giving online buyers and sellers an advantage, [it] impacts stores with a physical presence. Retailers told of the practice of ‘showrooming,’ where customers view products, try them out, write down model numbers and then order online, often while still in the store. Even more insulting to the retailer is when the product doesn’t work, they take it to the store for refunds or repair….Congress should act soon to level the sales playing field.”

The Santa Cruz Sentinel’s “As We See It [5]” column noted that there are still “a couple of flies in the good-news ointment” in regards to the deal that now has Amazon.com collecting and remitting sales tax in California.

“One is that Amazon might actually profit from the taxes…. Amazon has tried to work out a deal with the financially strapped cities of San Bernardino [which is actually bankrupt] and Patterson where the cities would rebate part of their tax collections back to the company in exchange for bringing the shipping centers and corresponding jobs for local workers….

“The state still needs to address this loophole, which could cut into the financial gains from e-commerce.

“The other issue is that Amazon doesn’t plan to collect tax on anything sold by the company's huge number of third-party sellers — thousands of small and even large retailers using Amazon’s platform.”

The solution, the Sentinel concluded “is that Congress needs to pass national legislation that would require all online sellers to collect sales taxes on all Internet purchases.”

In an op-ed in The Oklahoman [6], two former governors called for sales tax fairness, sooner rather than later. Brad Henry, former Oklahoma governor, and Mike Rounds, former South Dakota governor, stressed the need to level the playing field: “This year, Oklahoma will likely lose more than $200 million in uncollected taxes from online purchases. More important, the jobs of more than 170,000 individuals (more than 10 percent of Oklahoma’s workforce) who work in local retail stores are at risk.”

The two note that “governors are doing all they can to level the playing field for their small businesses. Their state-by-state initiatives have created a patchwork of tax laws that’s resulted in many of the large e-retailers calling for a federal solution. Congress must act quickly to pass a federal law giving states permission to require online retailers to collect sales taxes.”