Legislation should help local retailers

Published 10:16 pm Thursday, April 26, 2012

Joe Brown, owner of Country Charms, and many other local retailers should benefit from pending federal legislation.

Federal legislation that would require online-only retailers to charge sales tax has drawn the support of Gov. Robert Bentley, who believes the bills would level the playing field for all retailers while also generating revenue for the state.

Bentley is receiving praise from the Alabama Retail Association (ARA) for his backing of the Marketplace Fairness/Equity Acts, which would ostensibly close a tax code loophole that pre-dates the internet and has allowed web-based retailers like Amazon.com to avoid the sales tax required to be collected by their brick-and-mortar competitors.

According to a release from the ARA and the governor’s office, the tax difference gives online retailers an average 8.33 percent and as much as a 10 percent price advantage over small businesses in Alabama.

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According to the release, the new legislation would not create a new tax, but would require online retailers to collect tax that is already owed when consumers make purchases online. Currently consumers are responsible for calculating state and local taxes due at the point of sale and then remitting payment. Earlier this year a study conducted by the University of Alabama at Birmingham predicted Alabama would lose more than $1 billion over the next five years if laws to correct the online tax problem were not created.

Local retailers in Atmore are among the many small business owners who stand to gain from the new bills, not only from a more equal playing field, but also from the new revenue funneling into their state and city.

Wayne Dunn, owner of Earle’s Jewelry, said the laws are a good idea that will benefit all Alabamians, regardless of the impact on local retailers, many of whom have reported customers who use their stores as a way to decide whether or not they like a product before shopping for a better, tax-free, price online.

“We don’t see so much of that,” Dunn said. “But if it will raise some money for the state and local governments it is good. It will help the city.”

Dunn said, while his business may see a small increase due to the legislation, he believes the larger impact will be for the state and city governments.

“As for as helping us, the mentality is to order online. (Certain) age groups are going to be the ones to do that. If they find it online and they see what freight is going to be and it takes three weeks or a week to get it, then they weight that and they come in the store and if I don’t have exactly that same item, it didn’t do me any good anyway. I don’t think it’s going to bring everybody back to the local stores, but it will help.”

In a recent letter to Alabama’s congressional delegation, Bentley expressed his support for the e-fairness legislation.

“The bills will not create a new tax, nor will they require states to raise taxes,” Bentley said. “Rather, the bills will give Alabama the authority to collect sales taxes, as we currently do from local brick-and-mortar retailers, that are already owed from online retailers. Allowing us to effectively close this sales tax loophole would help both our state’s finances and our state’s small businesses.”

The Marketplace Fairness Act, sponsored by Sen. Mike Enzi, R-Wyo., Sen. Richard Durbin, D-Ill. and Sen. Lamar Alexander, R-Tenn., has 14 bipartisan cosponsors. The Marketplace Equity Act, sponsored by Rep. Steve Womack, R-Ark. and Rep. Jackie Speier, D-Calif., has 40 bi-partisan cosponsors. Both bills are pending in Congress and await further action.