Meadville Tribune

Breaking News

CNHI News Service Originals

October 24, 2011

E-commerce raises question of sales tax fairness


NORMAL, Ill. —

And they are protected by a 1992 Supreme Court ruling that mandates retailers to collect and remit sales taxes only in those states where they have a physical presence such as a store or headquarters. The decision came about in a test case involving catalog sales but the principle was extended to Internet sales as e-commerce evolved.

Bricks-and-mortar stores, including big-box operators Walmart and Target, didn’t say much at first, but now they’re ratcheting up the pressure on politicians to close the sales tax loophole for online retailers, and close it in a hurry.

The Supreme Court left open the door for Congress to enact a national solution, but there had been little interest in doing so until revenue shortfall caused by the persistent recession had state and local governments hunting tax dollars wherever they can find them. The push for a remedy is also driven by the accelerated pace of e-commerce and its negative impact on Main Street businesses.

The U.S. Census Bureau, for example, projects online retail sales in the U.S. will hit the $200 billion mark in 2012, up from $135 billion in 2009. Online sales for the upcoming holiday season are expected to surpass last year’s record-breaking $32 billion.

Forty-five states and scores of municipalities levy sales taxes, with various exemptions for essentials such as food, clothing and medicine. Consumers in those jurisdictions are legally obliged to keep track of their tax-free online purchases, and account for the uncollected taxes when they submit their annual tax returns.

This honor system is called a “use tax” and few people pay attention to it. Nor do the states and municipalities do much to enforce it.

U.S. Sen. Dick Durbin, D-Ill., understands the competitive disadvantage faced by bricks-and-mortar stores. He also calls the loss of billions of bucks in sales tax revenue “real money” for cash-strapped states that have cut funding for schools, police, libraries, roads and social services.

Text Only
CNHI News Service Originals
  • car-dashboard-gps.jpg Do cars have too many distracting gadgets?

    New cars are a gadget freak's dream; sophisticated navigation systems, Internet connectivity for mobile devices, systems to monitor your driving habits and a system that automatically summons help.

    August 3, 2012 1 Photo

  • Five myths about choosing a vice president

    Every presidential election cycle, once a party's nominee becomes clear, we focus on the veepstakes. Who will Mitt Romney choose? Will he play it safe with a traditional pick, such as Walter Mondale in 1976 or Jack Kemp in 1996? Or take a chance, as John McCain did with Sarah Palin in 2008? Either way, there is no evidence that a vice presidential nominee plays a great part in voters' decisions. But that doesn't stop us from overhyping the selection process.

    July 6, 2012

  • gift-card-2.jpg Gift card givers, beware: 6 tips to protect your purchase

    Many shoppers looking for a simple, easy present for friends and family this holiday season will turn to gift cards, letting the recipient do the shopping at their favorite store or restaurant. But the Better Business Bureau says consumer complaints about gift cards are on the rise, and buyers need to beware of potential pitfalls.

    December 14, 2011 1 Photo

  • vacancy-sign.jpg Stay scared: 10 most haunted hotels in America An overnight stay at a haunted hotel is a nightmare come true for many thrill-seeking tourists, and travel website TripAdvisor has named the top 10 places where you can scare up a good vacation.

    October 25, 2011

  • met092211amazonwarehouse.jpg E-commerce raises question of sales tax fairness

    A growing chorus of bricks-and-mortar small businesses are protesting what they see as tax law inequities driving them to the brink by requiring they collect and remit sales taxes while their electronic counterparts prosper through tax-free goods and services.

    October 24, 2011 4 Photos 2 Stories 1 Video 1 Link

  • met092211toddsmith.jpg Conflicted politics deter sales tax reform

    Lawmakers face political challenges in closing a legal loophole that allows online retailers to avoid paying sales taxes, as they weigh an issue of fairness against aversion to raising taxes.

    October 24, 2011 3 Photos 4 Stories 1 Video

  • Hugo Eight must-see films to close out 2011

    It's that time of the year, when all the films that are either designed to draw in big holiday bucks or win big 2012 awards get released. And those in love with cinema have dozens of options at the theater.

    October 14, 2011 1 Photo

  • Red_Leaf_BH.jpg SLIDESHOW: Fall colors on display across the U.S. The change in seasons brings a vivid display of fall foliage. Check out this gallery of photos of autumn colors from across the United States.

    October 14, 2011

  • organic-produce.jpg Organic: Is it worth it?

    “Organic” has long been one of those buzzwords floating around health- and food-conscious communities. The fact is, though, not a lot of studies actually confirm that people who eat organic food are more healthy than those who don’t.
    SLIDESHOW: The 'dirty dozen' of fruits and veggies

    September 23, 2011 1 Photo 1 Slideshow

  • Jane-Lynch-Emmys.jpg Who will win Emmys? See most-nominated TV shows Some epic HBO dramas along with a few popular comedy staples lead the way in nominations for the 63rd annual Prime time Emmy Awards, which air Sunday night.

    September 16, 2011 1 Photo