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The Chamber of Commerce joined the politicians’ backing of federal legislation.
Friday, July 19, 2013
Several Roanoke Valley politicians on Thursday expressed support for congressional legislation that would alter how online businesses handle sales tax.
They paired with the Roanoke Regional Chamber of Commerce in the announcement, in which the Marketplace Fairness Act was touted as a way to level the playing field for local business owners. If passed, the legislation would require online vendors to collect sales tax for purchases, just as non-online shops must do.
The bill is currently going through committees in both houses of Congress. It has earned the support of Democrats and Republicans alike.
Citing a study by conservative economist Art Laffer, chamber President Joyce Waugh said the legislation likely would aid the local economy and increase the tax revenue going into local coffers. Officials did not have an estimate for how much in tax revenue local governments stood to gain if the legislation passes.
With many current online businesses, consumers purchase items online and pay only an additional cost for shipping. They are then supposed to calculate the tax and send it to their respective state government, a process that is often skipped, Waugh said. It’s a system she described as increasingly archaic as online shopping becomes the norm.
“Initially, it was this new budding [online] industry, and there’s nothing wrong with that,” she said. “They had this wonderful break. But that’s been 10, 15, 20 years now?”
If passed, the legislation would pass the burden of delivering the tax dollars from consumers to merchants.
“The reality is, people may come into a store … and basically pick out what they want and then buy it online,” Waugh said. “People are going to do that sometimes, but why should the local merchant be put at this kind of disadvantage?”
Critics of the legislation — including the conservative think-tank Heritage Action for America — have argued that sales tax is already collected for a majority of online sales. They also argue that passing such a law would disturb the balance of power by requiring out-of-state retailers to collect taxes for states, creating “anti-competitive economic discrimination.”
Roanoke County Supervisor Mike Altizer said he was eager to support the legislation, although he admitted a major roadblock will be to find a way to track the tax dollars collected by online vendors.
“If we can find a way to the moon, we can certainly find a way to keep track of tax collection,” Altizer said. “You’re talking about hundreds of thousands, or even millions, of dollars in tax collection. There needs to be a level playing field for people who choose to buy locally.”
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