For over a decade, internet sales tax has been a heavily debated topic. Today, thousands of people shop online. As a consumer, one of the main perks of shopping online is not paying sales tax on many of my purchases. However, as an advocate for strengthening my local community, I have to look around and acknowledge what the loss of sales tax to internet retailers has done to my local main street stores. When we don't pay sales taxes on our purchases, we are costing jobs, slowing our local economy and weakening public services.
In 45 states and the District of Columbia, you pay some kind of sales tax when you walk into a local store (Murdoch, 2014) In Michigan, we pay a 6% sales tax on all non-food items. The revenue generated by the state sales tax helps fund our k-12 education, our state and local municipal departments, and various public transportation systems and freight programs (Josting, 2013). States are losing billions of dollars to online retailers who are not required to collect and pay back taxes to states. "The current default rule throughout the United States is that you must collect sales tax on internet sales to consumers in those states where your business has a "physical presence" (Steingold, 2012).".
The simple fact is, independent stores contribute the most per dollar to the local economy. Online retailers do not contribute a penny (Atrops, 2013). When you decide to purchase an item online simply because you can save money on sales tax, you should look around you and consider what your decision is costing the people around you. When your local retailer's sales decrease because people are trying to save a buck online, they are forced to decrease jobs and supplies that are available to you and your neighbors. When local retailer's sales decrease, they have less money to give back into your schools, roads, police and hospitals.
Billions of tax dollars in internet sales goes uncollected each year.