Taxing sales on the Internet
The old adage about “good things are worth waiting for” may be applicable in the case of enabling legislation to tax Internet sales of commodities like clothing, books, appliances, tools and a plethora of other things us consumers enjoy.
It has been a long journey, but it is “looking up” both at the federal and state levels.
It would take authorizing legislation both by Congress and the Colorado Legislature to allow the state and local governments to impose and collect their respective sales taxes on such sales transactions.
For many years, brick and mortar “main street” retailers and local government officials have argued that an unfair taxing policy exists as Internet sales have jumped upward.
Local merchants are mandated to collect and remit sales tax on all eligible purchases made at the store.
However, the same items are not taxed if purchased via the Internet, and there is not a physical store in the taxing agency’s boundaries.
This puts the local brick and mortar retailers at a disadvantage.
Also, as more and more consumers rely on “shopping on-line,” fewer in-store sales are realized, and profits decline and more vacant stores are realized.
Congress is sounding like it is more favorable to enacting the required legislation to establishing taxing sales on the Internet.
The Marketplace Fairness Act is the enabling bill which needs to be approved and signed by the President Barack Obama.
He has indicated he will sign the bill if it makes it way to him.
The bill has recently passed the U.S. Senate, but the House of Representatives will be a tougher sell.
Also, authorizing legislation is required at the state level.
At the recently completed legislative session, the Colorado Legislature passed the needed enabling legislation. Assuming all approvals are realized, it is projected that the State of Colorado would realize $73 million per year in additional revenue.
I have not seen any projections for Colorado municipalities yet, but it clearly would be a meaningful boost in revenue from out-of-state retailers who are selling goods on the Internet such as Amazon and Ebay.
I know we the public are not “gung-ho” about having more taxes to pay.
But this tax change would “level the playing field” among all retailers.
Plus, it would add support and strength to our local retailers in the shopping centers, malls and specialty stores.
We should want a healthy “main street.” Those retailers provide jobs that have been drying up as Internet sales have exploded.
Internet sales hit a record high of $226 billion last year which represents a 16 percent increase from the previous year.
It will be interesting to see how U.S. House of Representatives votes on the enabling legislation.
The Tea Party probably is jumping at the chance to kill this bill.
Bill Christopher is former city manager of Westminster and used to represent District J on the RTD board of directors.