Internet retailers should have to collect sales taxes just like their brick-and-mortar brethren do, says Stephen DeMaura, president of Americans for Job Security.
He supports the Marketplace Fairness Act, a bill now in Congress that would end Internet retailers’ exemption from collecting sales taxes.
The proposal would boost sales for brick-and-mortar stores, leading to more hiring and economic growth, DeMaura told Newsmax TV in an exclusive interview.
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“Right now, the government has its thumbs on the scale,” he said. “They are giving the Internet retailers a government subsidy of as much as 10 percent on every sale by allowing them to make sales without collecting the sales tax.”
The bill would simply “level the playing field between locally-owned brick-and-mortar stores and major Internet conglomerates like eBay, which are receiving a subsidy from the federal government,” DeMaura says.
Consumers in most cases are actually supposed to pay state taxes on Internet purchases, even when the retailer doesn’t collect them.
A failure to pass the Marketplace Fairness Act would “hurt consumers because we are opening them up to a variety of difficulties in having to remit sales tax on their own and even the possibility of having to remit them and pay sales tax in states they don’t live,” DeMaura said.
If it’s so unfair, then why has the loophole survived for more than 20 years?
“There are a lot of theories, but the simplest answer’s usually correct. And the simplest answer in this case seems to be there are many powerful opponents [of closing the loophole] in Washington who want to keep their subsidies and keep their preferences,” DeMaura said.
“This is another tax preference that one group of companies is receiving over another, and that’s the most likely explanation as to why it hasn’t been fixed.”
It’s not that DeMaura is opposed to Internet retailing. He says he does most of his own shopping online. “What we really are looking for are two businesses being able to compete on a level playing field without the government weighing in and favoring one type of business over the other,” he said.
“Local retail markets are very important to our communities. They’re the ones that sponsor the Little League teams and local fairs. It’s not the major online retailers that do that.”
How can small, local businesses compete with the Internet big boys?
“We are seeing some success across the country in local stores that offer a high-quality service and high-quality products to customers,” DeMaura said. “There are certainly some customer segments that really prefer to shop in person and to have the high touch that goes along with the quality services. So that might be part of the answer, but each store, obviously, is going to have to figure that out on their own.”
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