WI Residents Support Online Sales Tax

The article isn’t clear as to whether the issue is to collect taxes when the seller is within Wisconsin or if the seller is located elsehere.  If the issue is to require online retailers within Wisconsin to collect taxes for shipments destined for Wisconsin then that is one thing.  If, however, they want ALL online retailers to collect sales tax on items shipped from another state then that is unreasonable.  My company is is required to collect sales tax on every shipment that is delivered within our state.  We are based in this state and that is only right.  It has been the law in most states for over 100 years, however, that anything YOU purchase from a seller that is not based in your state is taxable and it is YOUR responsibility for paying those taxes.  This is nothing new.  It goes back to the advent of the “mail order” catalog when the large merchants such as Sears and Montgomery Ward had only one location. Now that the catalog has gone online it seems that everyone has forgotten what has been law for over a century.

Many brick-and-mortar retailers point to the so-called ‘tax exempt’ online sale as an unfair price  advantage the online seller has.  The 5% to 8% lower price is not the biggest reason people shop online. For many, it’s the fact that they can find items without having to burn $4 per gallon gasoline to drive all over town to find them.  They can shop online and get brands or models or items or sizes that the local retailer doesn’t sell.  They can shop at 3am if they so choose when the local store isn’t open.  A lot of people they don’t want to deal with going out to buy something when its too hot, too cold, too rainy or too far away to shop in a store that has no intelligent salespeople (if any!), overbearing, pushy salespeople, dark, unsafe parking lots or any of a thousand other reasons.  Sales tax?  That’s only an excuse used by brick and mortar merchants use to avoid addressing the other issues.

I live in the suburbs of a major city and I ride a motorcycle.  If I want to buy an accessory I can go to the motorcycle shops in my area.  The closest is 8 miles away and stocks next to nothing.  If you want something they don’t have (and that’s almost anything) they say “We can order it for you”.  The next is 13 miles away and has a good supply but short hours.  The next is close to 15 miles away but, again, stocks little.  This is a major metropolitan area and I can’t get what I want from a local retailer so what do the people do that live well removed from big cities?  Sales tax isn’t an issue – it’s an excuse.  If the local retailers believe having to pay sales tax will make a difference in whether the customer buys from them or an online retailer then they have missed the boat… yet again.

Also, as an online retailer I have a problem with the idea that requiring online merchants to collect sales tax is somehow “leveling the playing field”.  A brick and mortar store is required to collect sales tax at a single rate based on one factor: the physical location of his place of business.  An online merchant, on the other hand, would be responsible for knowing the rate of taxes to collect for the exact location of the customer.  Across the US there are literally hundreds of different sales tax rates (no, it’s not just ‘one per state’) and no one but the largest online merchants can possibly be able to keep up with the boundaries between all of the taxing jurisdictions – which can differ from one side of the street to another.  Across the US there are state sales taxes which may or may not have city and/or county taxes added to them.  There are zones within cities that are either exempt, discounted or have additional taxes added on top of that.  How can any small to medium sized online merchant possibly collect the CORRECT tax rate, then know who to remit those multiple taxes to – and in the correct amount for each taxing entity?  This will put the Mom and Pop operations out of business (those that choose not to avoid the tax issue) and will either close or severely limit the medium sized business. And this is supposed to level the playing field?  No, it won’t.  It’s putting an unreasonable burden and an unattainable requirement on the online retailer.  I believe it’s a case of the big businesses trying to drive the small businesses out.