Keep everything square

Monday, December 9, 2013

It was fitting that the U.S. Supreme Court chose the busiest online shopping day of the year-Cyber Monday-to announce its refusal to get involved in online retailers’ fight to keep their customers from having to pay state sales taxes.

The decision means New York’s online sales tax will stand, as it should. And the court’s hands-off conclusion signals that it’s time for Congress to finally pass the uniform online sales tax policy for all states that’s stalled in the House.

Consumers have been legally obligated all along to calculate and pay state sales taxes on their online purchases, but it’s a miracle when somebody takes the time to send the state a check.

As a result, local brick-and-mortar stores are at a serious disadvantage; shoppers check out their products and then go home and order online to avoid paying the tax. The stores lose out and so do the states, missing out on an estimated $23 billion in tax revenue that should go to schools, law enforcement and other needs.

In the early years of online sales, it made sense to give a break to businesses starting a whole new form of commerce. Not any more. Online shopping is a $230-billion business. Cyber Monday brought in $2.29 billion.

Now, if anything, it’s Main Street businesses that deserve a break. They create gathering places, and they’re more engaged in their communities, often donating time and resources to civic and charitable causes.

The U.S. Senate last spring put together a bipartisan coalition and passed the Marketplace Fairness Act by a 69-27 vote. First introduced 10 years ago, the act requires companies that surpass $1 million in Internet sales to collect state sales taxes. Wal-Mart and Amazon support it, although eBay is opposed.

But like many good bipartisan initiatives, it has hit a wall in the House, where Republicans say it constitutes a new tax on online shoppers. That’s ridiculous.

Main Street merchants, many of them small businesses, deserve a level playing field with their online competitors. The Supreme Court has cleared legal obstacles, and Congress has no further excuse to delay.

Editorial, Pages 10 on 12/09/2013