Editorial: Online sales should be taxed like any other
The U.S. Supreme Court fittingly chose the day known as Cyber Monday when online Christmas shopping is said to reach its peak to announce that it would not stop states from collecting sales tax on online purchases.
That is a reasonable decision, but it hardly settles the matter. Which is why Congress should now step up and pass the bill known as The Marketplace Fairness Act, a measure designed to bring some fairness and order to what had been the lawless universe of online commerce.
The fact that online merchants have been effectively exempt from collecting sales taxes on purchases when a seller was in one state and the buyer was in another rose from two main factors. One was that when online business was a new idea, it was widely seen as experimental and requiring some protection from the burdens such as tax collection that are routine for traditional brick-and-mortar businesses. The other was the fear that requiring a single business to know, much less collect, sales taxes set by a multiplicity of state and local units of government was beyond the capacity of such operations.
That was then. This is now.
In an amazingly short time, online businesses have become the big boys on the retail block, endangering the survival of traditional stores, especially small, independent shops. They no longer require, or deserve, safe harbor.
And one of those giants Amazon has not only figured out how to collect sales taxes that are assessed at different rates across the nation, it is offering its services (for a fee) to every other online operator, which may be part of the reason why Amazon favors The Marketplace Fairness Act.
That may be one of the few times you will see Amazon's Jeff Bezos, he of the experimental delivery drone, on the same page with Betsy Burton, owner of Salt Lake City's independent King's English Bookshop.
And, as small business leaders in Utah have pointed out, the status quo means that state and local governments lose some $180 million a year. Nationally, that figure tops an estimated $23 billion a year.
Fairness, lost revenue and the end of excuses add up to sufficient reasons to pass the bill.
Utah's Sen. Orrin Hatch has proposed some tweaks, such as a sunset provision and raising the small-business exemption from $1 million to $10 million in sales a year. If those amendments will get the bill passed, they should be adopted.
This matter should be settled by the time the next Cyber Monday rolls around.