Editorial: Online and on the corner

Originally Posted Online: April 24, 2013, 2:10 pm
Last Updated: April 24, 2013, 2:43 pm
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The Dispatch and The Rock Island Argus
We're not card-carrying members of the taxed enough party, but we loathe unnecessary new ones.

We especially oppose job-killing taxes and fees and welcome reforms that make taxes fairer for all.

That's why we were pleased this week when the U.S. Senate voted 74-20 to give the Marketplace Fairness Act a full airing. The bill would allow states to compel online sellers to collect sales tax on online purchases sent to buyers in their state. Currently states can only require retailers to charge sales taxes if they have a physical presence in their borders (which dates to a 1992 Supreme Court decision that predates, if not the Internet, certainly today's robust, global virtual marketplace.) "I believe it is important to level the playing field for all retailers," says U.S. Sen. Mike Enzi, R-Wyo., who sponsored the bill with Sen. Dick Durbin, D-Ill. "We should not be subsidizing some taxpayers at the expense of others."

Anti-tax lobbyists are pushing hard against the measure. But Monday's vote suggests there is strong support for a bill that doesn't create a new tax, but rather ensures that both real and virtual retailers are subjected to the same taxation rules.

We are, of course, hardly disinterested bystanders. We rely on the dollars brick-and-mortar store advertising brings in and healthier local stores are good for newspapers. But they also, are essential to vibrant and healthy communities.

Those local retailers who employ people and pay the taxes that support schools and other services in your community are clearly hoping uniform tax collection will help their bottom line by reducing showrooming. That's where the online shopper goes to the physical store to check out a product -- for example, try on shoes, test new cologne or test drive computer features -- but heads back home to order it online.

It's easy to see why the online customer likes it; she can take advantage of all the amenities -- great lighting and displays, warm and welcoming atmosphere, and helpful sales clerks -- that the hometown store offers for her convenience without adding any of the costs of providing them to the price of the items she buys. There isn't much Congress or the marketplace can do about that.

But this new requirement would remove at least one incentive for making online purchases by subjecting them to the same sales tax a Quad-Citian might pay at, say, a local Menard's or Farm & Fleet. Though the online customer already is supposed to calculate and pay the proper sales tax to their own state and local governments, many (perhaps most?) do not. That gives the online buyer a big incentive not to shop locally. If enough of them fail do so, the result is more and more empty storefronts and fewer and fewer retail stores, big and small.

Of course, the Internet tax requirement WILL mean some will pay more taxes -- as much as $24 billion extra a year. But that is money already owed, but not collected by local taxing authorities. Those are tax dollars local governments must collected elsewhere. Either way, you pay for it.

Another bonus of the Fair Marketplace Act is that it would require states to simplify sales tax systems to make it easier for online sellers to apply the disparate tax rates. It also would exempt businesses which report less than $1 million in annual revenues each year, protecting small- and mid-size online retailers from the burden of tax collection. That seems more than fair. Indeed, we urge lawmakers to reject efforts by eBay to boost that exemption to $10 million, hardly anyone's definition (except the eBay CEO's) of a mom-and-pop operation.

We also question arguments that imposing such taxes will be far too complicated and burdensome. "Do not let the critics get away with saying this kind of simplification cannot be done," Sen. Enzi said last March. "The different tax rates and jurisdictions are no problem for today's software programs."

Indeed, Amazon.com already has such a program to collect sales tax and does so in nine states which already require it. In today's Internet savvy world, a flurry of technology entrepreneurs are sure to quickly follow with cheaper, better options.

Ultimately, If the Marketplace Fairness Act becomes law, in addition to state and local governments, the biggest winner will be local retailers.

All we can say to that is, "It's about time!"


Local events heading

  Today is Monday, Sept. 22, the 265th day of 2014. There are 100 days left in the year.

1864 -- 150 years ago: The board of education has granted Thursday as a holiday for the children, with the expectation that parents who desire to have their children attend the Scott County Fair will do so on that day and save irregularity the rest of the week.
1889 -- 125 years ago: The guard fence around the new cement walk at the Harper House has been removed. The blocks are diamond shape, alternating in black and white.
1914 -- 100 years ago: The Rev. R.B. Williams, former pastor of the First Methodist Church, Rock Island, was named superintendent of the Rock Island District.
1939 -- 75 years ago: Abnormally high temperatures and lack of rainfall in Illinois during the past week have speeded maturing of corn and soybean crops.
1964 -- 50 years ago: Installation of a new television system in St. Anthony's Hospital, which includes a closed circuit channel as well as the three regular Quad-Cities channels, has been completed and now is in operation.
1989 -- 25 years ago: When the new Moline High School was built in 1958, along with it were plans to construct a football field in the bowl near 34th Street on the campus. Wednesday afternoon, more than 30 years later, the Moline Board of Education Athletic Board sent the ball rolling toward the possible construction of that field by asking superintendent Richard Hennigan to take to the board of education a proposal to hire a consultant.

(More History)