Time to tax online sales

We hope you had a jolly Cyber Monday yesterday, meaning you got all your online Christmas shopping done before your boss canned you for misusing company equipment and wasting time.

Cyber Monday is, for the uninitiated, the day millions of office workers return to work still possessed by Black Friday shopping fever. Finally freed from coma-inducing dial-up service at home, they use their employer's high-speed access to knock some names off the Christmas list.

Worse, online retailers are now offering special Cyber Monday discounts designed to further encourage cubicle workers to ignore their work and spend their money.

We have, of course, nothing against online and telephone retailers. One of the best in the land, L.L. Bean, is headquartered here.

But we continue to object to the unfair advantage online retailers enjoy over their traditional Main Street brethren.

While the local person running a shoe store or gift shop must charge a 5 percent tax at the point of sale, out-of-state e-retailers need not.

So, if you live in Vermont and order a cozy pair of double-soled, shearling-lined, leather slippers from L.L. Bean, you will pay no sales tax. Unless, of course, you are exceedingly honest and voluntarily agree to pay online tax at the end of the year with your income taxes.

If you live in Maine and order that same pair of slippers online, you pay the 5 percent at the time of purchase, no choice about it, just because L.L. Bean has a store here.

A foolish inconsistency, we say.

Here's the problem: online sales are growing by leaps and bounds year after year. Traditional store sales are not. Ultimately, if the trend continues, state governments will lose bigger and bigger slices of their sales tax revenue

That affects the services offered to a state's residents and, potentially, the other taxes they pay.

As states around the U.S. struggle to fund operations, we can't believe more are not thinking of ways to close this expensive and unfair tax loophole.

The original argument was that the Web retailing was new and it needed a sales-tax exemption to grow. Obviously, growth is no longer a problem.

The other reason? It was thought too difficult for big online retailers to comply with 50 individual state sales tax laws.

Certainly, computer programs can be designed to look at the address on a charge or debit card, know the state law and apply the right tax to the right product.

Ultimately, though, raising revenue for hard-pressed state governments isn't the main issue here.

It's about fairness. There is no reason giant online retailers like Amazon.com, Dell and Borders should enjoy a built-in tax advantage over local merchants struggling to compete.

 

 

 

 

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Comments

Larry Turbide's picture

no No NO!!!! This is just

no No NO!!!! This is just another way for The State to suck more money out of our pockets rather than trim their spending!!! If I'm planning on making a large purchase, say something a few hundred dollars or more, I'll either A: buy it online, or B: buy it in tax-free New Hampshire. And do I report it on my taxes? no....and why? Because I DIDN'T BUY IT IN MAINE!!!!!

ERNEST LABBE's picture

I shop on line quite a lot.

I shop on line quite a lot. Why because if I'm looking for a framus valve for a 31 Whippett a few key strokes and I find one. Saves all those phone calls and running around looking for it. And of course I pay the sales tax at the end of the year. This editorial shows just how liberal the SJ is.

John Chick's picture

The State of Maine already

The State of Maine already recoups taxes from out of State and online purchases by forcing Mainers to pay taxes for our alleged purchases on our State income tax form (whether we made any such purchases or not!)

If I buy something out of State, why should I have to pay sales taxes for it here in Maine. If you're on vacation in California and make purchases while there, why should you have to pay Maine sales tax? But that's how our State looks at things. Never mind that you paid sales taxes to California when you purchased the items. IS THAT FAIR?

I am appauled at the view the Sun Journal is taking on this issue. I make a concerted effort to not only buy local, but buy American. It's getting harder and harder to find products locally that fit that description. If local merchants want more business, they should stock more quality "made in the USA" products. As it is now, you're hard pressed to find anything that isn't "made in China."

John A. Chick

"If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be." -- Thomas Jefferson in a letter to Colonel Charles Yancey (January 6, 1816)

 's picture

Ah, but you're NOT paying a

Ah, but you're NOT paying a sales tax, you're paying a USE tax.

Jim Belyea's picture

I don't understand what the

I don't understand what the big deal is, doesn't everyone report their out of state purchases for tax charges on their income tax form.

Bob Stone's picture

Raise taxes while we are in

Raise taxes while we are in the depths of a deepening recession...

What could possibly go wrong?!

All the best,

Bob

DANNY FITZSIMMONS's picture

Unfair advantage I am so

Unfair advantage I am so sorry I beg to differ the cost of shipping outweighs the tax even if they claim free shipping the cost is still embedded in the price. That is the reason the law was passed many years ago so that out of state retailers could compete with local retailers and it has worked however people more and more want to order thier products through the mail for the reason of cost due to less overhead and sheer variety that no one store or even a hundred local stores could offer and if there is a store in the state YOU ARE charged the tax this is not about getting taxes it is about stores in this state and other states tring to get rid of any compitition the online cummunity uses.

 's picture

If the local merchant would

If the local merchant would offer even half of what is available online they wouldn't be struggling as much. Name a single brick and mortar operation with a fraction of what Amazon offers in the L/A area? Nothing even comes close. This isn't so much a question of tax fairness as ineptitude on the part of local businesses who chose to ignore the online market to their own peril.

Any problem that can't be solved with taxcuts, republicans pretend doesn't exist.

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