Our local businesses, our cities, our schools and our state are being hurt because many online businesses do not collect sales tax on purchases.
Under current federal law, states can only require businesses to collect sales taxes if the business has a physical presence in the state. In other words, our local retailers collect sales tax, but entities from outside the state do not.
This creates an unfair advantage for online businesses, which take money from the local economy but do nothing to help support local and state services.
Under state law, each individual is supposed to report all online purchases and pay the sales tax due as part of the state income tax. But, in reality, hardly anyone does.
Fortunately, legislation is pending in Congress to level the playing field for our local businesses by requiring internet retailers to collect sales taxes for online purchases and return them to the state where the shopper lives.
It is supported by the National Retail Federation and several responsible online retailers, such as Amazon.
The bill is expected to pass the Senate May 6 and then move on to the House where it faces more opposition.
Some representatives claim it is a tax increase. It isn’t. Taxes have always been due; they just aren’t being collected.
Our local retailers should not be at a disadvantage to online businesses from elsewhere. Our member of the House, Rep. Alan Nunnelee, and the rest of the Mississippi delegation should support this bill.