The Cleveland Plain Dealer, March 2, 2013
David Lewis, owner of Lewis Electronics in Shaker Heights, is fed up with customers who ask why he charges sales tax on items they can buy tax-free over the Internet. Some will even show him on their smart phones how much cheaper the price is online.
“As a brick-and-mortar retailer, I can get a [sale] because I provide better customer service than I need to,” he said. “But I don’t have a choice of paying that tax and I can’t afford to eat it.”
Lewis is among millions of retailers nationwide who are pinning their hopes on the latest version of the Marketplace Fairness Act introduced on Feb. 14, which would tax online sales at the same rates those items are taxed in stores.
The proposed federal law aims to close the loophole that lets online sellers like Amazon.com avoid charging sales tax in states like Ohio where they don’t have any physical stores or warehouses.
Proponents of the “e-fairness” bill, a coalition representing nearly 3 million retailers, companies and business groups, including the International Council of Shopping Centers, the Retail Industry Leaders Association, the National Retail Federation, and the Ohio Council of Retail Merchants, as well as Ohio-based DDR Corp., Jo-Ann Stores, Limited Brands, The Kroger Co., and Wendy’s International Inc.
“For nearly two decades, Congress has undermined the viability of local brick-and-mortar businesses by conferring a major competitive advantage on their large online rivals,” said Stacy Mitchell, senior researcher with the nonprofit Institute for Local Self-Reliance and author of “Big-Box Swindle.”
“Exempting internet retailers like Amazon from having to collect sales taxes effectively gives these companies a 4 to 12 percent price advantage over local stores. Amazon now captures more than one-third of online shopping and ranks as one of the top ten retailers in the country. It hardly warrants special favors.”
Twenty-five states (but not Ohio) have simplified their tax codes and designated a single collection site in anticipation of a federal law to collect taxes on online purchases.