Business Owners: Internet Sales Tax Would Level Playing Field

money keysA poll released on Thursday found that 51% of Pennsylvanians are opposed to the Marketplace Fairness Act. However, several small business owners in Pennsylvania support the internet sales tax because it would take away the advantages for online retailers.

“It would level the playing field,” said Mike Woodland, owner of Dan’s Camera City in Allentown and Easton. “Now there is nothing I can do (about the sales tax). It puts me in a bind, and it’s hard to remain competitive.”

The Marketplace Fairness Act, like its predecessor the Main Street Fairness Act, aims to allow states to collect sales tax on products sold by out-of-state retailers. For example, an online business based in Florida would have to pay Pennsylvania sales tax for products sold in Pennsylvania.

Under current law, only companies with a physical presence in a state have to pay that state’s income tax.

Pete Sides, the owner of the Robert M. Sides Family Music Center, which has locations in State College, Williamsport, and Wilkes Barre, believes the current law gives online retailers an unfair advantage because the out-of-state companies do not have to pay Pennsylvania sales tax.

“We get someone once a day saying they can get an item cheaper online,” Sides said. “There’s not level playing field. We have no choice.”

If the Marketplace Fairness Act is enacted into law, Sides said that competition with out-of-state companies “wouldn’t just be about the sales tax.” Rather, he claims, service, prices, and quality products would be the deciding factor for potential customers.

Dan’s Camera City allows customers to purchase item online as well as in their brick-and-mortar stores, but they still face a big challenge from out-of-state retailers.

“It’s a detriment to the state (not to have an internet sales tax),” Woodland said. “We are losing sales to out of state retailers.”

2 Responses

  1. As an independent retailer I absolutely agree. Either all sellers collect sales tax or no sellers should have to collect it. The technology to handle the collection and distribution of sales taxes would not be rocket science as long as the Federal government set down the terms of service and didn’t allow each state to muck up the waters. The USPS would be an ideal collection agent – they already know the address of every deliverable address in the nation; if they added the appropriate tax data and took on the collection/distribution role they could skim a couple of points off the top and become solvent again!

  2. “We get someone once a day saying they can get an item cheaper online,”

    And if they collected Sales Tax, the price would still be cheaper. Online would rather blame the Internet than a poor sales staff, lack of selection, or the BigBox store that store 30% of their business. You too can ‘level the playing field’ if you sell online as well. That way, if MFA passes, you will have to file monthly Sales Tax forms for 45 or more Stats too!

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