It’s no secret that people hate sales tax – and for good reason. If you buy a $500 TV in Massachusetts, you’ll end up forking over another 30 bucks due to the 6.25 percent sales tax. The pricier the product, the more sales tax you’ll end up paying.
Due to the variety available and the fact that sales tax is not included in online purchases, online retailers like Amazon.com are appealing to consumers looking to save money. Since sales tax is not included in purchases from online retailers, these companies can afford to lower their prices, giving them a competitive advantage over businesses with locations in state.
The Alliance for Main Street Fairness, with notable members like Target, Walmart and Best Buy, is a coalition of businesses looking to the government to require Amazon to include sales tax in their prices. You may not shed a tear for a large chain like Target or Sears competing against Amazon, but consider the effect on small, locally owned businesses that are attempting to compete against an entity such as Amazon; they struggle just as much.
Small businesses, due to sales tax, are forced to compensate for the tax by increasing their prices, a problem that Amazon doesn’t have to cope with. In states where Amazon does not maintain a physical presence, the company pays no sales tax; they aren’t forced to compensate for the tax, thus their prices are lower. This is bad news for “Mom and Pop” businesses, for they are less competitive due to the sales tax. This situation needs to change – Amazon should pay sales tax.
If Amazon were to begin paying sales tax, it would help level the playing field for all businesses, including locally owned “Mom and Pop” stores. Amazon would lose one of their main advantages over the rest of the market.
Sales tax on online purchases from Amazon would increase the prices a consumer would pay, but the advantages of aiding small business in this manner are many. Small businesses tend to be locally owned, so by purchasing items from a locally owned business, more of the revenue you provide the business will stay in the local economy (i.e. your town). If you buy a pair of shoes or boots online, more of your money goes to support the online retailer as a whole, leaving less money in the local economy. So by buying more from Amazon, you are depriving your state and your town of revenue.
Why else should one support a local business? Local businesses tend to buy from one another rather than from a distant store. That entails more revenue staying local. Moreover, from an environmental standpoint, buying from a local business means the product isn’t travelling as far and hence less gas is consumed. Buying from Amazon is diverting more money away from locally owned business, reducing the taxable amount of money that businesses make. The greater the number of businesses in a town, the more those businesses contribute in tax money, which means that much less you have to pay.
Money you spend locally stays local. Amazon does not contribute to your community like a small business does, and the competitive advantage that Amazon has by not being required to pay sales tax deprives both one’s state and one’s town of money. Amazon already possesses a wide variety of products for sale, making them difficult to compete with, in addition to the fact that their prices are lower due to inapplicability of sales taxes on their goods.
This needs to change.
They possess an unfair advantage over “Mom and Pop.” Buy books from a local bookstore, buy your winter clothes and camping equipment at your local outdoor store and if you still buy music, buy it locally. You could also join a “Cash Mob” and mob a local shop; small businesses need to be supported, and requiring Amazon to pay sales tax is a means to this end. By supporting small businesses, you’re supporting yourself.
Jeff Bagdigian is a Collegian columnist. He can be reached at [email protected].
