Requiring online retailers to collect state and local gross-receipts taxes — which total more than 7 percent in Albuquerque — on their sales to New Mexicans is not instituting a “new tax,” as Gov. Susana Martinez fears. It is simply leveling the paying field for local and out-of-state merchants alike.
Before trotting out the dreaded “t” word, Martinez and the 2013 New Mexico Legislature should consider businesses like Langell’s Art Supply, which had been selling off its Albuquerque inventory for months — and collecting the state’s gross receipts tax on those sales — before locking its doors for good Monday.
Langell’s had spent 67 years contributing to the state and city economies, paying property taxes and collecting the gross-receipts tax. It had as many as 22 employees at one time, paying salaries and employment taxes on those New Mexicans. It had supply contracts with the scientific laboratories and the state’s largest school district, yet by 2012 it was virtually reduced to “an Internet showroom” for out-of-state companies with the advantage of not having to collect gross-receipts taxes on their sales. The current policy is nothing if not a disincentive to buy local or, taken all the way out, to locate a business here.
Congress is considering proposals allowing states to require online and other so-called remote sellers to collect sales taxes. California, New Jersey and at least three other states are already there, cutting deals with online giant Amazon.com to ease the transition. The National Conference of State Legislatures estimates $120 million in online sales will go uncollected in New Mexico this year. And while the state estimate is much lower, $76 million, that’s still a lot of money not going to state needs.
The Martinez administration has made championing New Mexico business a major issue. It’s time to support the real drivers of the state’s economy and level the paying field.
Or bemoan the loss of the next Langell’s.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.