It is an unfortunate coincidence that more and more people are shopping online and, at the same time, state governments are feeling more and more cash-strapped. Result: states are increasingly looking for new ways to bring in tax revenue to fill their depleted coffers. Unfortunately for online shoppers, Internet retailers may be among the first targets .
Ever since the1992 Quill v. North Dakota Supreme Court ruling, federal law has banned states from charging shoppers a sales tax on products that come from a business without a physical presence in the state where the purchase was made. Back in 1992, though, there was little outcry at the state level as virtual shopping was limited to magazine-order purchases, which made up a very small fraction of total retail sales. For many people, the lengthy process of sending payment by mail was enough to keep them shopping at local brick and mortar stores, and paying sales taxes. However, come 2011, Internet business is thriving not only for its convenience brought upon by electronic payment, but also because of the tax loophole that allows most shoppers to skip paying a sales tax.
Unfortunately, times may be changing.
Taking the evolving nature of business as an opportunity to fill state coffers and an after note in the 1992 Supreme Court decision that allows Congress to change the law as it was written at that time, some lawmakers working through the little-known National Council of State Legislatures are arguing that the ruling was from a different time when the virtual shopping business was much different and that the law needs to be updated to allow taxes on Internet purchases. Basically, the lawmakers do not feel that the old ruling meant for magazine shoppers should apply to online shoppers as the thought of buying something on the computer probably hadn’t even been thought of at that time. In short, this case, if it finds its way back to the Supreme Court, will be one of whether new business practices should be covered under an old ruling made at a time when the practice in question had not even been established yet. Many state officials have actually putting pressure on Congress to change this law for the better part of a decade.
Question: what does this mean for photographers? Answer: a lot.
Yes, there are lots of local camera stores around, with the Cleveland area being blessed to have the Dodd Camera franchise with its numerous locations in the Cleveland metro area as well as West of Cleveland Loomis Camera in Elyria. Throw in the big box stores and presto, no shortage of places from which to buy photo gear. However, for the ultimate in selection and (usually) lowest prices, one has to go to one of the New York City photo superstores, like B&H Photo-Video or Adorama Camera. Now, thanks to computers, one can shop New York’s massive selections without ever leaving the home and, under current law, buy all one wants without having to pay a single cent of sales tax. This, combined with the already low prices one can find online, equates to major savings for shoppers, which is why online retailers are so popular. Personally, I’ll buy small gear locally and high-priced items online for just this reason.
In the future, if the tax man starts taking his share out of online sales, the states are going to start raking in huge amounts of money but business is sure to suffer as, with no tax loophole anymore, online sales are sure to slow as people are now forced to pay a sales tax in addition to the already present shipping costs to get what they want. Now, while this may be a boon to local stores, when it comes to getting hard to find gear in a hurry, things will be getting a lot more expensive if state lawmakers get their way. In addition, charging new taxes in a time of recession is one of the worst things government can do to help stimulate the economy.
In the end, if we are forced to pay taxes on Internet purchases, both the consumers and the online retailers are going to lose, which is why, in this case, it is best to leave the status-quo alone and thus force governments to be fiscally responsible and make budget cuts in times of a bad economy the same way that we the people are forced to do.
For people feeling passionately about this issue, below are links that will take you to contact information for both Ohio’s state legislators as well as any national representatives from every state. Remember, this is a democracy and that your representatives are supposed to be looking out for your interests, so do not hesitate to contact them and share your opinions on this very important issue.
Contact your representatives:
Ohio State Representatives
Ohio State Senators
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