Even though the National Retail Federation is pushing again for Congress to require online and remote sellers to collect state and local sales taxes, online shoppers don’t seem fazed.
Since online shopping’s genesis, the federation has urged Congress to pass legislation making online and remote sellers collect state and local taxes.
The federation says current laws give online shopping an unfair advantage because customers will purchase items online rather than having to pay taxes at brick-and-mortar retailers.
Anne Grubbs of Bowling Green said she shops online fairly often, especially for birthday and Christmas presents. If she can’t find something she wants at local stores or doesn’t want to get out, shopping online from home is convenient. It was especially helpful when she was ill at Christmastime and wasn’t able to get out, she said.
If Congress were to pass legislation that would make people pay taxes on online purchases, she doesn’t think it would affect her shopping habits.
“I wouldn’t like it, but I’d have to do it,” she said.
Even if the retailers’ federation gets its way, Grubbs said online shopping likely wouldn’t suffer.
“It might hurt it at first, but I think eventually it would recover,” she said. “If you’re seeking the convenience, you’re going to shop online anyway.”
The federation said in a news release that it wants Congress to “level the playing field.” As the law stands now, online stores have to collect state and local taxes only in states where they have a physical presence.
Jean Secrest of Bowling Green, also an avid online shopper, said she likes the freedom to shop regardless of what time of day or night it is, not having to pay for gas and the wide selection available. But she recognizes online shopping can be problematic.
“Most times, it doesn’t help our local merchants, which is a problem,” Secrest said.
Not contributing to local retailers hurts the state budget, Secrest said, which causes problems for issues like public university funding. Secrest rarely checks her online purchases to see if she’s been charged sales tax, so potential legislation wouldn’t change how frequently she shops online.
“I think the only thing it would benefit would be the state government and their revenue,” Secrest said.
The House Judiciary Committee held a hearing Wednesday on the online fairness legislation.
The federation says the legislation is needed to provide a level playing field for local merchants.
“Many local retailers report the phenomenon of ‘showrooming,’ where consumers come into their stores to look at merchandise, then order it online,” according to the federation’s website.
The information on the website noted that state and local governments lose “billions of dollars in ... sales tax,” which is used “to pay the salaries of essential workers such as police officers, firefighters, ambulance crews and schoolteachers.”
Depriving retailers of business hurts everyone, according to the federation. “All of those public workers are among retailers’ customers, and when customers lose their jobs, retailers lose sales,” the website said.
Lisa Martens, owner of Nat’s Outdoor Sports, said she hopes the legislation is eventually passed.
“I’m definitely for that because it puts us all on a level playing field,” she said. “It’s just not fair to the normal retailer because we do have to charge tax.”
Brick-and-mortar retailers also have overhead expenses that an online store operating out of a warehouse doesn’t have, Martens said. She emphasized that buying from online sellers may be convenient, but the buyer had better beware.
The online or remote sellers aren’t “the ones that are giving back to the local community. They’re just taking (the customers’) money,” Martens said. “Think of all the tax money these different states are losing. ... Everyone’s being shorted from that.”
Greg Shea, co-owner of Tea Bayou, shops online for his restaurant’s needs and for his own use. Tea Bayou has an online store, which he said helps reach a broader customer base.
“We’re subject to price comparison as well,” Shea said, referring to how customers shop around for the best prices is the same for online stores as for brick-and-mortar businesses.
Not having to pay sales taxes all the time, such as when he purchases teas from overseas or other states in the U.S. that don’t have a store in Kentucky, is “a little bit of a benefit” for Shea, but not enough that he would stop shopping online if it were mandatory for every store.
“People have become so used to shopping online. I don’t think it’ll make a difference in the long run,” Shea said.
Still, the downside to no sales taxes from some online stores is very real.
“The realization is there are tax dollars that are being lost out there every second, and states need as much as they can get,” Shea said.