By Emily Swenson Brock
Brock is a community activist
who lives in Raleigh Court.
I adore my neighborhood block in Raleigh Court. My neighbors are all kind, hardworking, creative and down to earth people. Oh, and we all have lots of kids with lots of energy. So we welcome surprise snow days. It gives us time to bunch together in one of our houses for camaraderie so our kids can play and the grown-ups can get some collective relief from cabin fever.
On one of our recent 8-inch days, one of my neighbors was over with his family. He is the proprietor of one of the few road-bike shops in Roanoke. He has a family of four and throws an excellent block party. It sounds like his business is fine; his bottom line is enhanced by the many peripheral business opportunities available to a bike enthusiast (pro-sponsorships, gear, etc.). But he shared with me a source of worry as a small business owner. It’s an anecdote that is somewhat surprising to me, but happens in his bike shop at a regular clip. A customer comes into the shop, eyes a $4,000 road bike, leaves, and then comes back with an identical bike for a $50 adjustment. More often than not, the customer bought the bike from a presumed “deal” online.
You don’t have to be a small business owner to realize that the proprietor has missed out on the sales revenue, but the locality is also out the sales tax it would have collected to perhaps fulfill its commitment to outside recreation. After a quick online investigation, I began to appreciate just how urgent this problem is on a national level.
As it currently exists, our tax structure creates vast disparities between brick and mortar businesses and online retailers, and costs state and local governments across the U.S. an estimated $23 billion per year in taxes owed on remote sales. In Roanoke alone, purchases made within our jurisdiction from online retailers located outside the city are estimated to be approximately $1 million in lost revenue. A million dollars per year that could be spent on improving our greenways and our parks or funding other capital projects that enhance the opportunity to enjoy our one-of-a-kind natural environment. In other words, a million dollars that could be used to help the city fulfill a whole host of public services.
All 45 states that impose a sales tax already require consumers to pay a tax on online purchases. However no federal law exists to enable states to compel online stores to require consumers to pay this tax. In the absence of such a law, these taxes are not being paid, and local businesses are being put at a 5 to 10 percent competitive disadvantage to remote sellers.
This is a perpetual issue faced by Congress, and one in which our own Congressman Bob Goodlatte is familiar. eFairness legislation seeks to revise the current tax structure for online sales. Goodlatte chairs the House Judiciary Committee in which this legislation pauses year after year. To be clear, efairness legislation (specifically, the Marketplace Fairness Act) never advanced out of the committee, even after several years of deliberation and discussion.
Passing fair Internet sales tax legislation now has never been more important because of the tremendous growth in online sales that has taken place over the years. And as online sales continue to increase the amount of taxes going unpaid to state and local governments to provide critical community services also increases.
Again, this isn’t a new tax. It’s already on the books. It just isn’t paid very often.
To be perfectly honest, I like an online deal just as much as the next guy, but I also like my neighbors. And I certainly do not like an online deal acquired at the expense of my neighbors and my community. The time for congressional action to repair this broken tax system, redress these losses and level the playing field for both brick and mortar and online retailers is now.