The online sales tax law is overdue
Local retailers face an invisible wall, but the barrier is very real. Stores must charge customers the 6.875 percent sales tax while their Internet counterparts operating outside the state do not.
This gives the online sellers such as Amazon an advantage over the brick-and-mortar businesses that provide local jobs and help pay for schools, city and county services.
The federal government has a chance to end the disparity by enacting the Marketplace Fairness Act. The legislation would give state and local governments the option of requiring large online stores to collect a tax on qualifying sales. Minnesota and Wisconsin, we suspect, would quickly adopt such state laws.
If you don't think collecting roughly 7 cents on a taxable purchase is a big deal, consider that online sales last year reached $225.5 billion. The U.S. Commerce Department reports those sales jumped 16 percent from 2011.
For every $1 million in taxable merchandise that reached Minnesotans' doorsteps but for which the tax wasn't collected, the state lost $68,750, Officials estimate those dollars added up to $397 million in 2011.
Now consider that retail sales overall rose 4.2 percent. That means more and more people are buying things online ... and states are losing more and more sales tax revenue. Governments are increasing income and property taxes as a result.
The Marketplace Fairness Act in the Senate and a similar bill in the House have broad bipartisan support. We hope federal lawmakers adopt the legislation soon so state lawmakers can put action on their 2014 agendas.
Let's tear down the invisible wall. This would help level the retail marketplace and, we hope, slow state government's appetite for increasing other taxes.