Tuesday, Jan. 3, 2006 | 8:17 a.m.
Retailers who sell products over the Internet did well again this holiday season, as online purchases were even better than last season's. Nielsen/ NetRatings, a research firm, estimated that online buying totaled $30.1 billion from Oct. 29 through Dec. 23, an increase of 30 percent compared to the 2004 holiday season.
Shopping over the Internet offers great convenience for customers and is an excellent way of doing business for retailers. In recent years, however, an issue of fairness has arisen about online sales and the fact that these retailers don't have to collect sales taxes as do merchants who sell strictly from brick-and-mortar stores.
The U.S. Supreme Court in 1992 ruled that states on their own couldn't collect so-called "remote" sales taxes -- those purchases made by consumers from retailers in other states -- and that this could only be required if Congress specifically mandated it. Despite the fact that stores that don't sell over the Internet are put at a competitive disadvantage -- and that states and local governments get hurt because they lose out on vital revenue for schools and other vital government services -- Congress has refused to end this disparity in sales tax collections. The National Conference of State Legislature estimates that states lost out on $8.9 billion in revenue from online sales in 2004.
Two weeks ago U.S. Sen. Mike Enzi, R-Wyo., introduced legislation that he says would bring equity to this situation, requiring catalog and online retailers to collect taxes on their sales. It's the right thing to do and we hope Congress passes a law restoring fairness to sales tax collection.
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