Jay Evensen
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'Marketplace Fairness' would make you pay more online

12/3/2014

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If you find yourself one of these days paying local sales taxes on something you buy from your favorite craft site in Maine, you may have Salt Lake Mayor Ralph Becker to at least partially blame.

Or to praise, whichever is your preference.

Of course, I’ve seldom known many real folks who appreciate having to pay more for a thing. My vote is for blame.

But Becker wouldn’t be the only one. You might add Gov. Gary Herbert to the list. Both are growing in influence nationally, and both support finding ways to charge local sales taxes online.

If you’re looking for that illusive big issue that rips apart the conservative-liberal Mason-Dixon Line, this could be it.

The Marketplace Fairness Act, as it is known in Congress, would let states charge sales tax on purchases made out of state. It has support (at least in concept) from Republicans and Democrats. It’s also opposed by Republicans and Democrats.

If there is a divide here, it may be age. Those over 50 voted for the bill last year in the Senate. Those under 50 opposed it.

Becker is 62. He is at the center of this issue because he was just elected president of the National League of Cities and Towns. At his installation in Austin, Texas, he outlined this as one of his priorities, noting that he believes local businesses (the ones with actual storefronts on actual streets) are at a disadvantage with their virtual competitors because the local ones collect sales tax.

Herbert is 67. He was elected vice chairman of the National Governors Association. In a prepared statement sent to me Tuesday, he said, “As remote sales increase, the state’s inability to enforce state tax law is problematic. Not only does it create an advantage for online retailers in their competition with brick and mortar stores in our community, but it also creates a financial burden on taxpayers by preventing a broadening of the tax base and a lowering of tax rates.

If I had a dollar for every time I’ve written about this subject over the past 20 years, I’d have at least enough to park downtown — if I could figure out how to work one of the city’s parking meter kiosks.

The arguments haven’t changed much, but they also haven’t gotten any simpler, either. Supporters are quick to tell you this wouldn’t be adding a new tax. People already are supposed to pay sales tax. You’re even supposed to pay it voluntarily on things you purchase from a catalog, even though hardly anyone does so.

But this argument falls apart faster than that Christmas toy you’re assembling for your grandchildren when you consider the bill would raise $100 million or more for local governments in Utah. Where would that come from if not your wallet?

Some conservatives argue the lack of ability to collect sales taxes online means the government is, by default, picking winners and losers in the marketplace. But it’s not that simple.

A lot of companies with real live stores also have websites. Some offer prices cheaper online than in person, which can be maddening when you shop with a smartphone in hand and try to haggle with a checker. Meanwhile, the bill would exempt small businesses, although there is disagreement over how small is small.

Shoppers, of course, are the ones who ultimately pick winners and losers, and despite all the talk, they don’t seem to have a clear preference. Store owners talk of people who come only to look at items they later buy online. But research published on Accenture.com has found that even more, up to 88 percent, also occasionally browse online, then call local stores to see if they have those items in stock for immediate purchase. For many, instant gratification is worth a little extra in price.

There can be no denying governments have much to gain by taxing online sales, but shoppers can be excused if they find it hard to believe politicians would lower tax rates to compensate.

Taming the Internet, meanwhile, may be harder than convincing someone their little Etsy shop isn’t going to make it big some day.

Sure, compromises (gasp!) are possible. Becker and Herbert might find ways to make that happen.

It’s just that, despite recent turnout figures, some shoppers still vote. That reality could make even the over-50 crowd in Washington hesitate.


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    The author

    Jay Evensen is the Senior Editorial Columnist of the Deseret News. He has nearly 40 years experience as a reporter, editor and editorial writer in Oklahoma, New York City, Las Vegas and Salt Lake City. He also has been an adjunct journalism professor at Brigham Young and Weber State universities.

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