Our View: Net sales tax inevitable

Thursday , March 06, 2014 - 11:53 AM

Editorial Board

It’s time for online businesses to develop methods in which to collect sales tax for Internet transactions. Opponents of taxing online sales have had considerable success the past generation in stalling Net taxation, but the resistance is crumbling.

Internet sales taxation appears to be inevitable. The partial implementation of sales taxing by many mega-Net firms, including Amazon and Walmart, have led to legislative efforts to codify the tax on online sales.

The U.S. Senate is debating the Marketplace Fairness Tax. Sponsored by Sen. Mike Enzi, R-Wyo., it mandates that online sellers collect sales tax throughout the entire U.S. Opponents of Enzi’s bill argue that smaller online merchants will have a very difficult time collecting sales tax from nearly 10,000 taxing authorities.

However, the rapid advancement of Web services, as well as the near universal use of broadband-type services, weakens that complaint. Web sites, such as avalara.com, provide an easy manner for online businesses, large or small, to legally collect sales.

Although there has long been a libertarian appeal to businesses, such as Amazon, that made the lack of sales tax seem refreshing, it can’t be disputed that ignoring sales tax for Internet merchants is unfair to traditional, “brick and mortar” business establishments. Locally, our merchants have to compete with huge online firms that have avoided sales tax. It’s time to level the playing field.

In order to qualify for the stringent rules for sales tax collection, an Internet seller has to have $1 million in annual sales. That’s a high enough limit to protect smaller sellers from being overwhelmed. And, making sure that major online sellers collect sales tax has the potential to bring scores of billions of tax dollars to government coffers. We need that revenue.

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