Meadville Tribune

CNHI News Service Originals

October 24, 2011

Conflicted politics deter sales tax reform

(Continued)

CORSICANA , Texas —

“I'm happy to collect it because I know it is money that’s going to pay for things that make life better for this community,” Jones said. “But is it fair that I have to collect it and other people (online competitors) don't?”

That argument has yet to yield widespread support. Anti-tax advocate Grover Norquist, head of the Americans for Tax Reform and creator of the “taxpayer-protection” pledge that all but six Republicans in Congress have signed, calls the proposed Main Street Fairness Act in Congress a “massive...Internet tax hike that is dead on arrival for any fiscally responsible lawmaker.”

University of Tennessee economist William Fox, who's been monitoring online sales tax collections for a decade, said some Democrats may shun the bill as well. “You've got federal lawmakers who know they'd be taking all the heat for expanding compliance on tax collections,” said Fox. “But they'd get none of the revenue.”

Yet Fox also believes the impact of the recession and tax-free online e-commerce on state revenues, along with a building coalition of bricks-and-mortar businesses that want fairness, may make it harder for Congress to ignore the issue.

Through the Alliance for Main Street Fairness, retail advocates representing big-box and small-store merchants have mobilized their members to speak up. The Alliance's website is filled with video testimonies of small business owners – typically averse to big-government regulation – calling for federal intervention.

That message connects with retailers like Jacques and Ruth van der Plas, who opened a home décor store in Gun Barrel City, Texas, after they couldn't find jobs. They didn't know why online retailers weren't required to collect the sales tax until an Alliance member told them. Ruth's response: “Well that's not fair.”

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