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February 19, 2013 8:56 am

EDITORIAL: Sales taxes should apply to online retailers

Written by Tessa Schweigert

Operating a local business in a rural area has never been easy, but competing against online retailers in recent years makes it especially difficult. An uneven playing field only makes it worse.

Online retailers often do not collect sales tax, thanks to a loophole in the current system. For local businesses, there’s no other choice — they must collect a state’s required tax, 4 percent in Wyoming’s case.

Sen. Mike Enzi, R-Wyo., wants Congress to close that loophole. Under the proposed Marketplace Fairness Act, states would be allowed to collect sales tax they are owed from out-of-state sellers, such as online retailers. Co-led by Sen. Enzi, the bipartisan measure was introduced Thursday by a group of 53 senators and representatives.  

Businesses in the Big Horn Basin already know what it’s like to compete with retailers who don’t collect sales tax. Just look at the cars heading to Billings on weekends.

We aren’t looking to change Montana’s tax laws. That’s up to our northern neighbors.

And that’s just it — states should be able to determine what taxes are collected from transactions, whether payment is to an online merchant hundreds of miles away or in a downtown shop.

“The Marketplace Fairness Act is simple — it is about states’ rights, and it is about fairness. At a time when state budgets are under increasing pressure, Congress should give state and local governments the ability to enforce their own laws,” Sen. Enzi said in August.

Across America, states collectively lost an estimated $23.3 billion in uncollected sales tax from out-of-state sales in 2012, according to the National Conference of State Legislatures.

“The amount of uncollected sales tax will continue to grow, especially with the unprecedented growth of online commerce,” read a 2011 letter by conference leaders.

It’s important to note that the act does not create new taxes or increase existing taxes. States would simply have the ability to enforce their own sales and use tax laws. Also, the act doesn’t apply to small online businesses with less than $1 million in annual nationwide sales.

The proposal has gained support from businesses with huge online markets — Amazon.com, Target, Wal-Mart and REI.

The Marketplace Fairness Act legislation has failed in the past, but we hope it finds a different fate in Congress this session.

You don’t have to look far to see the impacts of online retailers in our downtown. When Powell’s community-owned store The Merc downsized earlier this year, the board president attributed the changes partially to a retail climate radically altered by online sales.

It’s important to recognize again that dollars spent locally go so much further than money in online sales. Local businesses deeply support our community in many ways.

Online retailers nationwide shouldn’t be given an unfair advantage over the brick-and-mortar stores that do so much to enrich our communities.

Senator hosts ‘listening session’ in Powell

Sen. Mike Enzi will be in Powell from 1:30-2:30 p.m. Wednesday, Feb. 20 at The Commons, 135 N. Bent St.

Take the opportunity to share your concerns and thoughts with him.

1 Comment

  • Comment Link February 19, 2013 12:51 pm posted by TN

    You bet,tax & spend RINO's have learned how to make a fast buck from underpaid workers,and now they want to tax everything we use.Remember,it isn't very far across state lines to not pay sales tax.

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