OUR VIEW: Support online taxes to level the playing field
Brick-and-mortar businesses face plenty of troubles lately. Main Street -- and by Main Street, we mean typical, traditional business -- has enough on its plate as it fights continued battles against shifting populations and box-store giants.
But at least those enemies can be fought. What traditional, brick-and-mortar businesses can't do is wage a fair fight against online companies that are not required to charge sales taxes. It's a loophole that gives online stores a definite advantage in today's marketplace.
It's David vs. Goliath, but this time, Goliath is invisible and unreachable.
Finally, it seems somebody might do something about it.
Legislation that would force online retailers to collect sales tax is suddenly clearing hurdles in Congress. Opposition from years past seems to be waning.
Early this week, the U.S. Senate voted 74-20 to put the Marketplace Fairness Act up for debate and amendment. If it passes the Senate and then the House, online retailers will be forced to collect sales tax -- perhaps as much as $24 billion, which would then be passed on to states.
This is what it means: If this bill passes, online retailers will have to charge those extra few pennies on the dollar -- the same sales tax we pay when we purchase something on Mitchell's Main Street.
And in case you didn't know it, we South Dakotans are currently expected to pay online taxes, on the honor system. We're not kidding -- if we make a purchase online and sales tax is not charged, we are supposed to remit the appropriate sales tax to the state Department of Revenue.
Of course, we don't know of anybody who ever has done that. Even U.S. Sen. John Thune, R-S.D., admitted recently to The Daily Republic that he doesn't do it.
Meanwhile, tax-free Internet commerce is costing South Dakota approximately $60 million per year in lost revenue. Money we spend is being sent to states like California, while our local businesses are being choked to death in a fight against an unseen opponent.
It just isn't fair.
We urge our congressional delegates to support the Marketplace Fairness Act, and we likewise urge readers to understand that this bill is meant to protect business and jobs here in South Dakota.