A time for fairness

A few years ago, when our state representative Jeff Wilson proposed a bill that would have required online retailers to collect and charge the same 6 percent in sales tax that their bricks and mortar brethren must do, we were cool towards the idea. Our thinking at the time was driven by a desire to see consumers have as many choices and possible opportunities to save money as possible, while, the nation's - and Vermont's - economy was recovering from the worst recession in a generation or two. We were also thinking that a new generation of entrepreneurs, who were moving to open up businesses based on the e-commerce selling over the Internet, might be adversely affected.

Today however, it is the traditional mom-and-pop style independent owner who hangs a shingle outside a physical storefront who needs the help. Digital commerce is long past the days of its infancy - a scant 10-15 years ago - and no longer needs the additional benefit of a 6 percent price advantage. Fortunately, the stars may be aligning to fix that problem.

The U.S. Senate is poised to pass a piece of legislation shortly, known as the Marketplace Fairness Act, that would force online retailers to collect and distribute the sales tax where the buyer lives. Up until now, that has been required of online retailers only when they had a physical presence in the same state where a buyer lived. In theory, the onus was on the buyer to pay the sales tax to the municipality or state, as opposed to having it collected by the selling merchant. In practice, that didn't often happen, and enforcement was rare.

Internet sellers have many advantages that their traditional brick and mortar competitors don't enjoy. They don't have to maintain buildings, and in many, though not all cases, don't pay the same property taxes. Nor do they create the same downtown commercial streetscape that helps give a town, city or community its identity. While it may be a stretch to be thinking in terms of a day when the traditional store will be voted out of existence by consumers who find the ease of buying goods, merchandise and services online too compelling, it's not hard to picture a time in the not-distant future when such invisible commerce is the norm, and the quaint little shop the exception.

An exemption has been carved out for online merchants who post sales of less than $1 million, so the cost and burden of making all those sales tax calculations won't affect the smaller ones, who in many cases are online versions of a physical storefront.

For a town like Manchester, this leveling of the playing field should come as good news. And unlike a few years ago, it's clear that this course of action is the right approach for today. Consumers who want to ensure that they've found the best possible bargain will probably still be able to "showroom" - that is, scan a piece of merchandise on a smartphone and compare the price offered in a store with that offered online, and bargain from there. While that's strikes us as more than a little tacky, it happens. And it can go on happening.

Mega-online retailers like Amazon have moved from strength to strength, and you have to give them credit for developing a new business model, perfecting it, and continuing to innovate and push the boundaries. Some are even seeing the advantages of having physical stores as well. But it is not the Amazons of the world who need the de facto benefit of a four to seven percent price advantage today. Hopefully, the Senate will vote through the bill next week, and the House of Representatives will follow. Then, if you live in Vermont, but buy online from a website based in California, you'll still have to pay the state's 6 percent tax. At this point, that's only fair.


If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.

Powered by Creative Circle Media Solutions