McAlester News-Capital, McAlester, OK

CNHI Special Projects

October 23, 2011

E-commerce raises question of sales tax fairness

NORMAL, Ill. — Dick Smith thrives on competition. At 69, he braved the heat and sandstorms of the Saharan desert to compete against rivals half his age this summer on ABC’s adventure reality show, “Expedition Impossible.”

Smith was edged out before he could reach the finish line, but the retired Army Ranger felt he’d been in a fair fight. He doesn’t say the same for the small-store business climate to which he returned and relies on for his livelihood.

Smith contends his outdoor-gear store in this central Illinois college town is forced to play by unfair tax rules that compel him to add almost 8 percent in sales tax to a customer's bill, but exclude his online competitors from the same burden.

“I have people come in here all the time who tell me they can get their gear cheaper online,” Smith said. “When I have to add on that sales tax, it isn't tough math to do.”

Smith is among a growing chorus of bricks-and-mortar small businesses protesting what they see as tax law inequities driving them to the brink by requiring they collect and remit sales taxes while their electronic counterparts prosper through tax-free goods and services.

Studies show more than 1 of every 4 dollars in purchases covered by sales taxes go uncollected in the U.S. because of online transactions, adding up to an estimated $12 billion annually in lost revenue, according to the Center for Business and Economic Research at the University of Tennessee.

The biggest beneficiaries are Amazon, eBay, Overstock and other giant online retailers that operate almost entirely in cyberspace. But there are also a multitude of smaller Internet businesses that reap the rewards of tax-free commerce. They object to collecting sales taxes because of the varied rates and exemption rules across the country.

Text Only | Photo Reprints
CNHI Special Projects
Seasonal Content
AP Video
Bon Jovi Helps Open Low-income Housing in Philly Pipeline Opponents Protest on National Mall Hagel Gets Preview of New High-tech Projects S.C. Man Apologizes for Naked Walk in Wal-Mart New Country Music Hall of Fame Inductees Named 'Piles' of Bodies in South Sudan Slaughter New Yorkers Celebrate Cherry Blossom Blooms SCOTUS Hears Tv-over-Internet Case Justice Dept. Broadening Criteria for Clemency Chief Mate: Crew Told to Escape After Passengers 'Miss Meadows' Takes Holmes Back to Her Roots Biden: Russia Must Stop Talking, Start Acting David Moyes Out As Manchester United Manager Raw: Leopard Bites Man in India Iowa College Finds Beauty in Bulldogs High Court to Hear Dispute of TV Over Internet Stowaway Teen Forces Review of Airport Security
NDN Video
Viral: It's Not Pitbull - It's Amy Poehler! Raw: Leopard Bites Man in India Jenna Dewan-Tatum Strips Down Rise of the Milkbots TRENDING: Brian Williams Raps 'Gin and Juice' on ‘Tonight Show’ Middle School heroes rescue students from burning bus WHOPPER OF FISHING STORY: Florida man catches massive Mako shark Maks Chmerkovskiy's "DWTS" Meltdown The many faces of Mike Woodson Ape Builds A Fire And Toasts Marshmallows In Amazing BBC Video Manchester Utd sack manager David Moyes "RHOA's" Dramatic Brawl High school, College Drug Ring Busted In Montgomery County High Court to Hear Dispute of TV Over Internet Raw: Keflezighi, Jeptoo Win Boston Marathon Teen hitchhikes in wheel well of flight from California to Hawaii Lindsay Lohan's Jaw-Dropping Secret President Sends Message To Boston And Marathon Runners LA Pastor Attracts Churchgoers with Pot Lauren Stoner Shows Off Her Incredible Bikini Body
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.