Internet Sales Tax: Simple Fairness

Scott Webb Headshot

Scott WebbAs most of us are aware, the federal government is finally considering making Internet retailers charge sales tax. As of this writing, the bill waits in the House for formal debate. Regardless of what happens there, we passed a major milestone when the Senate went on record that Internet businesses need to start charging sales tax like everybody else.

There’s been a lot of talk about this in the industry — some 18 comments are lodged on this site — and of course in the wider business community, where large vested interests are lined up on both sides of the debate.

It always makes me smile to see the arguments of people who are fighting against a particular issue because they stand to lose money. That’s the one thing they never say, even though it’s obvious to everyone. It would freshen the world a bit if Internet retailers would just say, “I’m against this bill because it will hurt my profits.”

Instead it’s silly diversions like, “I don’t know what sales tax to charge different localities,” when software can handle that problem in an instant. Or, “I don’t want to be burdened with new tax accounting responsibilities,” to which the traditional retailers reply, “Welcome to our world.”

Make no mistake, if passed, this law would have a real impact on our industry. The Internet retailer’s advantage would be cut significantly by adding that 6 to 9 percent hike in the consumers’ effective price.

Suddenly the “Wow!” price becomes a very good price, but as we know, in sales, that difference can mean a lot, and cause customers to begin to consider other factors in the sale. That can only work to the benefit of the brick-and-mortar folks.

But let’s dispense with this chatter. It’s just a matter of simple fairness. And eventually — although it may take time, even a long time — simple fairness wins the day.

Scott Webb

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