There’s a terrific new post up on the New York Times‘ “You’re the Boss” blog. Written by Jay Goltz, a small business owner from Chicago, it makes a great argument for online sales tax collection.
We strongly urge you to read the entire post yourself, but we couldn’t help quoting from parts of it:
On browsing in local stores but buying online:
I have a friend who owns a shoe store, and he tells me that people come in all of the time, try on some shoes, spend half an hour with a member of the sales staff, and when they have made a choice they announce that they are going to order the shoes online — as if it is something to boast about. Boasting to your friends is one thing; boasting to someone who has just spent time trying to help you is rude at best.
On the ultimate consequences of browsing locally but buying online:
What happens if your local retail stores become a showroom for online stores to such an extent that it forces them out of business? Are you perfectly happy not touching and trying out products? It has already happened with the closing of hundreds of Borders book stores. This is not a level playing field — and I say this as someone who has both retail outlets and substantial online sales.
It’s also happened with several Barnes and Noble locations. When one Manhattan location closed last year, the New York Times interviewed several browsers at the store, and most said they liked to visit the store but didn’t buy anything. They preferred to buy online.
On how the loss of sales tax revenues hurts communities:
Zappos does about $1 billion in sales every year. If Chicago represents 2 percent of the company’s business, that would be $20 million in annual sales. That represents about $2 million dollars of sales tax that the city no longer gets — and no longer gets to use to pay for police, firefighters, teachers and street repairs . . . . How much more is being lost on sales by Amazon (which owns Zappos) and all of the other online retailers?
The loss of sales tax, as well as the loss of the real estate and payroll taxes that those closed stores used to pay, is damaging your city and state. This is a zero-sum game. You may think that if a local store can’t compete with Zappos or Amazon, that’s the store’s problem. And you may be right. But why do the rules favor Zappos and Amazon? Not forcing them to collect sales tax has given them an unfair advantage that ultimately will force all of us to pay higher taxes to local governments.
On local stores and the community:
Saving money online can be a pleasure. But these local stores employ your friends and neighbors, spend millions of dollars in your community, and are hardly taking advantage of anyone. . . . Whether it is the local frame shop, furniture store, luggage store, florist, shoe store, bicycle shop, or eyeglass store, many are struggling. If they are doing well, they are not doing that well. Most stores are not ripping people off. They are trying to make a living, give service, support employees and pay taxes — and they are getting challenged by large companies that can buy cheaper but don’t necessarily provide better value.
This is a fantastic post, and we highly recommend that you head over to the New York Times and read the entire thing.