Did you shop online on CyberMonday this week? If so, did you pay the local and state sales tax on your purchase? By law, the consumer is supposed to pay the sales taxes owed on purchases bought from out-of-state online retailers on his income tax return as a use tax. However, there’s a good chance most consumers didn’t if they ordered from an out-of-state online retailer.
This puts our hometown brick and mortar businesses at a 5 to 10 percent competitive disadvantage to these out-of-state online retailers. Plus, millions of dollars in owed state and local sales taxes go uncollected annually. In South Carolina alone, that means more than $250 million in sales taxes owed by consumers but not collected annually.
There’s an answer to this situation that will level the playing field for our hometown brick-and-mortar businesses. The Marketplace Fairness Act could be considered in the U.S. House of Representatives this month. This legislation would grant states the authority to require out-of-state online and catalog retailers to collect sales taxes at the time of a transaction - exactly like our local retailers are already required to do.
Members of the state’s Congressional delegation need to know that this is an important issue for both our hometown businesses and our cities and towns. Make sure your Congressman sees the impact this legislation can have on his district. Click here to get more information about the MFA and details about how to contact your Congressman now.