State business needs Market Fairness Act
by Bill Heath
March 19, 2013 12:00 AM | 1439 views | 2 2 comments | 9 9 recommendations | email to a friend | print
Last year, the Georgia Legislature passed a bill — signed into law by Gov. Deal — that would require online retailers like Amazon to begin collecting and remitting our state’s sales tax, but so far it has not worked. While some are following the law, Amazon still hasn’t collected a dime. It’s time for Congress to step up and pass the Marketplace Fairness Act, a federal fix for this expensive and totally unnecessary problem.

There is no reason why Internet companies shouldn’t have to collect and remit sales taxes. Their Main Street competitors certainly do; even the smallest of local retailers dutifully collects this tax on every sale. In doing so, they are not only following the law, but also helping provide funding for public services that are generally paid for by sales tax revenue. Online-only retailers, on the other hand, skirt their responsibility refusing to collect and remit sales tax, even though it is still due.

It all goes back to a misguided Supreme Court decision made decades ago, before anyone imagined what the Internet would do to retail commerce. Now, with Internet sales booming and increasing every year, the built-in advantage and a lack of sales tax enforcement gives cyber sellers an anachronism we can no longer afford to ignore.

This Internet sales tax loophole makes it hard for Main Street Georgia retailers to compete with their online rivals. This not only hinders job creation and the growth of local economies, it undermines the shopper-friendly commercial centers in Georgia communities. If we allow online companies to unfairly dominate the retail industry, our cities and towns will become much less attractive places to live.

Funding for public services also suffers. Out-of-state Internet companies can take full advantage of Georgia markets, but do not have to contribute anything to the maintenance of infrastructure and services that support those markets. Each year, Georgia loses hundreds of millions of dollars in unpaid online sales tax and ad valorem tax that is paid by local businesses. That money could have fixed a lot of roads and hired a lot of teachers.

The Marketplace Fairness Act simply creates a mechanism that empowers states, if they choose to do so, to require sales tax payment on Internet transactions. It does not impose a new tax; it just makes it possible for states and communities to collect the tax revenue rightfully due to them. It exempts startup and small Internet sellers, and makes sure states have sales tax policies that online retailers can easily follow. It would do nothing more than what the name says — it would restore fairness to the system.

Congress tried to pass the Marketplace Fairness Act last year, but couldn’t get it done by the end of session. This time there are identical versions up in the House and Senate, with strong support from both Republicans and Democrats. But that does not make it law. The Marketplace Fairness Act will not be able to help Main Street retailers and local communities until both houses of Congress officially pass it and the President signs it.

If you believe local stores deserve the right to compete with Internet retailers on a level playing field, and that online sellers should collect the taxes due to the state to help support our communities, tell your representatives in Congress. Ask them to vote yes on the Marketplace Fairness Act and to urge their colleagues to do the same. It’s only fair.

Sen. Bill Heath chairs the Government Oversight Committee. He represents the 31st Senate District which consists of Haralson and Polk counties and portions of Paulding County.
Comments-icon Post a Comment
Small Business Owner
March 20, 2013
To make things fair how about we reduce sales taxes instead. That way we keep the money we work hard for instead of giving it away to the politicians to waste on their special interests.
Joe Cobb Crawford
March 22, 2013
Free Lunch To All Customers

Ignorance and apathy has always been the favorite playground for unethical businesses and monopolies. Skirting and ignoring the law by not collecting taxes also isn't a novel idea of Amazon alone. Amazon knows and capitalizes on the fact that paying no taxes is politically popular. Paying tax, like dieting and exercising, is something everyone else should do, but not me, we reason. Cleverly, Amazon has taken advantage of this mind set. Their business strategy leads with a simple principle "When you rob Peter to pay Paul, you always have Paul on your side."

Unfortunately, Peter in this case is the local Mom and Pop store in your home town. Mom and Pop are broke, if they are still operating. They are also being robbed of customers, because they do what Amazon refuses to do: Obey the law and collect taxes.

Paul, in this case is Amazon and the Big Box companies. Big Box is fat and happy. Today, he's more profitable than ever. Like Amazon, he has a herd of attorneys and blind, wink-wink, paid off politicians to help him remain profitable.

How long customers will continue to drink the free Amazon cool-aide is uncertain. What is certain is stated by the author of a book about one ship-wreaked island survivor. Robert Louis Stevenson told us all;

"Everyone, at some time or another, sits down to a banquet of consequences." Enjoy your "free" meal.

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