For many years, local retailers have operated with a disadvantage: They have to collect sales tax from their customers, while online competitors dont. That means online outlets could basically offer the same thing as a local store with a 9 percent discount, due simply to government policy.
That could change now, and it ought to.
The Supreme Court this past week ruled in a case from South Dakota that states could collect sales taxes on online sales, even if the vendor did not have a physical presence in the state. That reversed a court ruling from 1992 that said the opposite, which of course had paved the way for the explosion of internet sales.
The game has changed since then. No longer tiny little startups, online retailers have used the rules of the game as well as their own innovation, and the convenience and enormous choice of online shopping to grow into behemoths. Amazon had $119 billion in sales last year.
That has drained the bank accounts of state and local governments. Locally, Manhattans sales tax collections have dipped in recent years to the tune of millions of dollars, and that has meant less money to spend on projects and programs that could benefit the community. At the state level, the story is the same; the numbers are just bigger.
Congress should have fixed this problem years ago, but remained leery of the politics of appearing to raise taxes, or stifle internet growth.
But President Trump praised the court ruling. It cuts across political lines.
Heres what should happen now: Assuming that Congress wont act to make the rules uniform across the country, the Kansas Legislature should assure that the state begins collecting taxes from online sales as soon as possible. That will take legislative change and quite a bit of regulatory work, but there are millions of dollars at stake.
And while all of us as consumers certainly benefited by buying tax-free goods online for the past 25 years, we all need to realize that we were really just ducking the existing law. Sales taxes help support the public programs that we all rely on in one way or another, and its only fair that theyre applies uniformly.
The Manhattan Mercury
