When Mom and Pop opened that neighborhood store 40 years ago, they didn’t have to worry about unfair competition from other Moms and Pops setting up shop somewhere on something called the Internet.
They collected a tax on the goods they sold and turned the money over to the state. But most online retailers today don’t have to collect the tax. Consumers pocket the savings, giving the online store an advantage.
Booming online sales are pitting not only large brick and mortar operations like Wal-Mart and Target against online giants like Amazon, but also small hometown retailers against online operators.
Last week, the Senate passed an online sales tax bill that could level the retail shopping field. It would allow states to require online retailers to collect the tax and send it to the purchaser’s state.
It’s estimated that nationwide more than $11 billion in tax revenue was lost from Internet sales in 2012. New Mexico didn’t collect more than $120 million.
New revenue, while certainly welcome in a poor state like New Mexico, isn’t the overriding point. Fairness is.
Local stores are doubly harmed when shoppers preview their stock and then go home to buy online — saving at least the amount of the sales tax. That was a contributing factor to the demise of longtime Albuquerque art supply company Langell’s, which closed in 2012 after 67 years in business.
President Barack Obama has indicated support for the tax, but it faces opposition from some conservatives who see it as a tax increase. However, this is really just applying an existing tax to all players in the commercial retail game.
The House should pass this bill for the good of all the Mom and Pops back in their home states.
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.