The Alliance for Main Street Fairness

Back in September, I wrote a little about internet sales tax, and the anger the issue provokes among independent retailers across the country. At the urging of Peter Rose of the Chelsea Group in Wyandotte, Mich., I’d like to bring up the issue again and post a video released by a group called The Alliance for Main Street Fairness. That organization is dedicated to closing the infamous internet sales tax loopholes that allow many American consumers to get tax-free merchandise by purchasing online, rather than in local shops.

The Alliance for Main Street Fairness sent independent retailers to Washington, D.C. to have it out with their congressional representatives and urge them to support the Marketplace Fairness Act in the Senate and the Marketplace Equity Act in the House. The video below consists of some interviews with those retailers.

The first of many independent retailers to speak out in this video is a menswear retailer, Steve Ashworth, owner of the 75-year-old Ashworth’s Clothing in Fuquay-Verina, North Carolina. “We feel that the sales tax not being collected by the online retailers—when we each sell the same products—is not fair,” he said.

Other retailers included a couple of jewelry stores, a bicycle shop and a baby clothes store. Watch below.

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Comments

  1. avatar Joseph Brennan says:

    Fair is fair. By all means, call your Senator and ask him to tax the Internet. Your next move should be to register a domain name for your brick and mortar business and to start a Twitter account so that you too can become a tax-paying Netizen. Get creative and get rid of your old stock on Ebay, or find a niche like I did (doublebreastedsuit.com) and fill it, or provide an advertising venue for those who can. Just go online, or prepare to eventually go out of business. Virtual is the new reality.

  2. avatar Trey Kraus says:

    Coincidentally, I watched the first Congressional hearings on the bill being submitted by Rep Lukas from Indiana on CSPAN last night. It’s scary for small retailers – again. The costs of compliance in time and money will once again crush the small business keeping the playing field uneven. The bill also includes catalog and phone orders. We do many phone orders for tux rentals and replenishment orders. It is proposed that we will know have to keep track of where the customer is from and how much they bought – how do we confirm which state? Do we have to have retinal/voice/fingerprint scans and FBI background checks to confirm identity. Since the panel included the major internet players, the talk was skewed towards their advantage; this is a good opportunity to distance themselves from brick and mortar with internet businesses. The only big player concerned was eBay. Overstock, Amazon and others thought their business would continue to grow, although not as rapid as it is during the tax-free world. I found that real interesting as eBay is composed almost exclusively of small businesses.

    • avatar Harry Sheff says:

      Thanks for the comment, Trey. But let me make sure I understand: are you a small business owner who is against the internet tax reform?

      Either way, you raise a very important point. For e-commerce operators big and small (that can mean small brick-and-mortar stores that also sell online), there’s a lot of anxiety about how state sales taxes, particularly out-of-state taxes, would be collected and processed. It could be a logistical nightmare. Anyone out there have any thoughts?

      • avatar Peter Rose says:

        Why, yes – – I do have a thought. Thanks for posting, Harry.

        “Logistical nightmare” is the term Harry used, but it is also the drumbeat rationale for shying away from tackling this, used by tax evaders and governmentos that have been co-opted by the Amazons of the world. Valid point is right, and yet, retailers like me (us) have been forced to comply at virtual gunpoint with the rules and stipulations and penalties for failure to comply FOREVER. Nobody ever voiced any such concern for me or mine. Can anyone say “surreal”? As in, “You ARE kidding, right?”

        My thought, my advice is: Quit whining, Join the Club. Think we LIKE the responsibility and pain in the neck of collecting sales tax for our state? The bureaucratic gauntlet, the indignity of the state auditing us and declaring something we didn’t think was taxable – – -PAY UP?!?!? It’s so simple a cave man can do it, but that doesn’t make it pleasant. Frankly, I’d rather that they eliminate our responsibility to collect (heck, why should we – – – nobody else does…, but let me guess, what are the odds of that happening?

        What would have happened in this scenario in Boston back in the vicinity of 1776? I don’t think people are getting the message in the spirit it is felt: Enough, now. We have put up with the slanted playing field for a long time. Enough; Fix it. Make it fair, and STOP letting inequity happen like this again. Stop downplaying the impact on small businesses as the internet companies are given a free ride while our states lose millions and millions in revenues. (Michigan estimate is something like $240 Million per year. And we are laying off State Troopers and can’t fix roads and college tuition are going up again….)

        Enough from me. Writing it down just makes me more exasperated. Thank you so much again, Mr. Sheff. Exasperated or not, having a forum for venting is better than not having same.

  3. avatar Harry Sheff says:

    Vinnie Rua commented on this issue in our forum discussion. Read that here: http://www.mrketplace.com/forums/general-discussion-group1/retailer-topics-forum3/internet-sales-tax-thread147.0/

  4. avatar Trey Kraus says:

    Harry – I was merely pointing out that at every turn the small business gets the short end of the stick. I was captivated by the hearing and how the big businesses dominate the process and direct it to favor them (PCI compliance was the previous issue where the bigs distanced themselves from us small guys – Sony and Polo can’t keep your info secure, so we all have to upgrade equipment for a fee and move to an online merchant service for astronomical fees knowing the big guys have negotiated sweet deals that we can’t get). Yes, adding an internet tax is great, but the way the conversation was heading, it would be impossible for the small business to compete against the big business. The software needed to organize the collection is cost prohibitive. The time to calculate and organize the tax collection for the states would cripple most small businesses. Actually, I’m in Delaware, so I am already on a level playing field – we have no sales tax. This law would tremendously add to my operating costs, but I see where it would be fair to everyone. It will also negatively effect our phone reorders and tux rental business, too.

  5. avatar Peter Rose says:

    Lest I wax too militant in demeanor (perhaps too strident, and inference of revolution is a tad over the top), a clarification:

    We don’t like paying taxes or collecting them for the state. But that IS how the state works. That IS our role to play, and we do so. Consistently, year after year. We do our part. We have no choice, to be sure, but we don’t really mind – – the system is on place, and it works, as far as it goes. We just can’t comprehend that the powers that be enabled anyone to do what they do without playing b=y the same rules.

    The argument of “too difficult” is specious; Think about it as if there was a store across my street that didn’t have to collect for the state. We do, they don’t. We sell the same items, they charge 6% less. Who would get the business? It’s really as simple as that, yet we have to listen to reason and rationale ad nauseum yo simply skirt the responsibility, to avoid paying or collecting taxes.

    If it’s too hard to figure it out and make it work, then the business model is faulty. Too complicated works in no other business model proposal. It never was fair, and now the pressure is increasing to eliminate that unfairness. NOT tilt it my way, just STOP it from being tilted the other way. AND increase the revenue for our state.

    The Alliance for Main Street Fairness, along with The Michigan Retailers and what must be a ton of other, credible organizations, has done much to make the bizarre and obtuse policies that disadvantage hard copy stores more obvious. I can’t seem to be able to be aware of it and not chime in, support their support, and say Thank You for your efforts. I would wish for more of an indication that anyone else out there in the stores shares my perspective, for the sake of our industry.

    • avatar Harry Sheff says:

      Wow, this is a great discussion! Thank you again, Peter, for initiating it. Without your input, we may not have covered this topic.

      I think what retailers like Trey are arguing is not that it’s too difficult to set up systems to pay taxes in their home states — indeed, he’s based in Delaware, which has no sales tax — but setting up systems to deal with taxes for every other state. So if he sells a suit to a guy in California, he’d need to make sure that guy paid his California sales tax. If he sold a pair of shoes to someone in Michigan, he’d need to make sure that that person paid the Michigan sales tax. And onward multiplied by however many states have applicable sales taxes.

      Does such a system exist? Maybe. But obviously, Trey is fearful of its cost to his business. Am I right?

      • avatar Trey Kraus says:

        Harry and Peter – yes, it’s the state by state unique tax rates (possibly up to 10,000 different jurusdictions – think counties and cities with their own additional sales taxes) that must be collected and remitted. Oh, did I forget to mention that not all items are taxed in every jurisdiction. Pennsylvania has sales-tax exemtions for certain but not all apparel items. In NJ, golf shoes and tuxedos are subject to taxes while other apparel items are not. How do I know that a customer is really from the state they claim? If you buy a lot of good on the interent, do you set up a billing address in Delaware and ship to another state? What happens when the states go looking to collect? Do I have to go back to the customer? Will I be liable for any shortfall due to misreporting? As you can see, it gets thicker and more convoluted the longer you peel away at the issue.

        The large corporations can implement and/or add a software package to handle this efficiently and cost effectively. Those same software packages are not cost efficient for small businesses. Some states do offer a small percentage for the collector (store) to keep, but in our low volume, that would never cover the cost of collecting and remitting for those jurisdictions – plus each jurisdiction will have their own collection credit percentage. If the legislation is enacted as presented, the large internet businesses will have an advantage.

        I don’t want to sound bitter about large businesses; there can be room for us smaller operations as we focus on personalized service and product selection specific to our clientele. I do get a bit torqued when large businesses are writing our laws to further exploit and retard small businesses.

        I’m all for an internet tax, but not where it unlevels the playing field more than it already is.

  6. avatar Trey Kraus says:

    You can find the Congressional Judicial Committee hearing on CSPAN http://www.c-span.org/Events/Lawmakers-Consider-Internet-Sales-Tax/10737425898/ to hear for yourself and make your own opinion. It’s a quick 2 1/2 hours long.

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