A bill requiring online retailers to collect sales tax from customers has passed the Senate vote, but in Kansas there are mixed feelings about if the Internet Sales Tax would help or hurt small businesses.
Some say it will level the playing field, while other say it could hurt local businesses.
Richard Zeller, owner of Dee & Mee Hobbies, says his biggest competitor isn’t another local business selling model planes and cars. It’s the internet.
“It’s got pretty much everything you could possibly want on there at very good advertised prices,” Zeller says.
Cyber shopping lets many skip the sales tax, because while customers are supposed to report online purchases when they file their taxes, few actually do.
“A lot of people are buying more online so therefore that money and that tax isn’t being collected, so it’s harder for the government to properly do its job,” Zeller says.
Many hope the Marketplace Fairness Act, or Internet Sales Tax, would change that.
“It brings those dollars back to the state and to local governments that many of them are needing these days,” says Great Topeka Chamber of Commerce Vice President, Christy Cassidy.
“It allows us to compete on a level playing field,” adds Zeller.
But business owner Ken Daniel says the law would just cause headaches for business owners.
“Every time they sell anything over the internet, they’re going to have to determine where that purchaser is and then they’re going to have to record that and report it monthly,” Daniel says.
If someone from Kansas made a purchase from a business based in another state, the owner would be responsible for finding out what state the customer lives in, what the sales tax is there, and then sending the money to the state government.
“The smallest of businesses, they don’t even have the computers that will do this stuff,” Daniel says.
But reports show billions of dollars are being lost each year because of online shopping, and Zeller says the Internet Sales Tax is the only solution.
“I think you’ll definitely see more in-store sales,” Zeller says.
Kansas is one of 24 states participating in the Streamlines Sales and Use Tax Agreement, which is a move by states to simplify their tax laws and regulations.