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Study: Ohio could recoup $200M in sales tax



Published: Thu, October 20, 2011 @ 12:00 a.m.

By Marc Kovac

news@vindy.com

COLUMBUS

The state could recoup more than $200 million in annual sales-tax revenues and thousands of jobs in the retail industry if Congress moves to require states to collect and remit the taxes on online purchases.

That’s according to a study released by the University of Cincinnati this week on behalf of a retail-merchants group that is pushing for the change.

“This issue is paramount to Ohio’s economy,” Gordon Gough, executive vice president of the Ohio Council of Retail Merchants, said during a press conference in Columbus on Tuesday.

“Ohio is losing jobs and revenue because of an online sales-tax loophole in federal law [that] allows online-only retailers to avoid collecting sales tax at the point of the sale while brick-and-mortar stores [and] small businesses that are here today do every day.”

Legislation introduced in the U.S. House of Representatives would give states the ability to collect sales taxes for online purchases.

Ohio consumers who make online purchases already are supposed to pay sales tax, but many do not.

According to the study, though more than 60 percent of households in the state made at least one purchase from an online seller last year, less than 1 percent of Ohio income- tax returns included sales tax payments on Internet sales, according to the study.

“Given the difficult economic circumstances affecting Ohio’s retail businesses and its state and local governments, finding a way to bring fairness to the online sales-tax process would be a huge economic boon to the state,” said Jeff Rexhausen, associate director of research at the University of Cincinnati’s Economics Center, which produced the study.


Comments

1VINDYAK(1799 comments)posted 2 years, 11 months ago

Given the costs to our state, I feel we should be ordering on-line sales merchants begin collecting and paying sales taxes to Ohio. Many of these merchants are now off shore and in Asia.

This would be a major blow to internet sales and cause internet merchants to either avoid Ohio sales or pay the tax and provide in-state stores. Policing this will be difficult, but doing nothing is losing us millions of dollars in unpaid sales taxes.

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2SWilson(2 comments)posted 2 years, 11 months ago

There is a simple solution: TaxCloud (http://taxcloud.net).

The statements by large Internet merchants and others continue to confuse me. My company now utilizes a PayPal checkout button seamlessly integrated with TaxCloud.net. Now my business is enabled to calculate, collect and remit sales tax for any jurisdiction in any state. It is simpler in most cases for my business to calculate and remit sales tax than to deal with shipping. If my business can manage to collect legally due sales tax simplifying my customer’s lives, why is it so hard for Ebay, Overstock and their affiliates as NetChoice claims?

Technology available freely on the Internet (like TaxCloud) is more than capable of seamlessly handling sales tax calculation and remittance. Sorry everyone, the "too burdensome" argument carried merit in 1967 and in 1992 (when SCOTUS last ruled on this matter), but in the era of modern computing where Ebay maintains a dominant position, multi-jurisdictional sales tax calculation and remittance is easily accomplished. TaxCloud accurately calculated sales tax for any jurisdiction for any state in less than 13 MILLISECONDS!

So what is the real reason Ebay and other companies choose to evade supporting our schools, hospitals, infrastructure, libraries, public parks and so much more by refusing to easily collect and remit sales tax legally due?

It is clear that the real burden of sales tax falls upon the consumer, and there is no burden to business of any size. Any business can easily calculate, collect and remit sales tax legally due utilizing modern technology while simultaneously realizing greater efficiencies and profit. Consumers truly benefit by eliminating the burden of having to track and remit sales tax due on Internet purchases.

The MSFA (Main Street Fairness Act) is proper legislation enabling states rights to collect sales tax legally due while maintaining states individual rights to tax independently. Remember the Boston Tea Party. Origin based sales tax fails to maintain state’s Constitutional autonomous taxing authority.

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3SWilson(2 comments)posted 2 years, 11 months ago

Unrealized to most consumers are the true costs of permitting and embracing the illegal practice of tax evasion. This year Connecticut enacted the largest tax increase in it's history. The increase included eliminating clothing exemptions, raising the sales tax rate %.35, %1 on all luxury goods over $1000 and tax on alcohol went up %20. CT is not alone. West Virginia now taxes groceries to make up for lost sales tax revenues resulting from increasing convenience of online shopping. Rhode Island as well as doubled, that's right a %100 increase, on all park entry and parking fees. Property taxes in states such as NY have increasing at an alarming rate to maintain funding primarily for education.

Lower income wage earners are actually the hardest hit. Without the means and available credit to participate in online sales their only option is to shop locally paying increased sales tax rates, such as in CT, paying the tax bill for those who selfishly continue to evade their tax obligations. More interesting is the fact that for every million dollars in sales a brick and mortar company provides 3.8 jobs, while large online merchants provide only .8 jobs for the same amount of sales. Tax policies are not created or imposed to provide segregation of businesses. The passage of the MSFA will level the playing field benefitting many businesses and workers in every state.

Sales tax is a fair and impartial tax billed directly to the consumer and in no way harms businesses when applied fairly and equally. Mall vacancy rates are now over %20 nationally and increasing as more brick and mortar stores continue to close their doors. As more stores close jobs are lost, homes are lost and.... you get the picture. The real burden is now upon the millions of small businesses who provide many more jobs and opportunities to find ways to compete with the large Internet retailers.

The real burden today is upon the consumer and the many small to medium d businesses being consumed by misinformation. I discovered that by progressively employing modern technology my small start up business is now able to compete in any state without fear of nexus laws or affiliate relationships, and is more efficient and profitable. The Main Street Fairness Act will enable states rights to collect sales tax legally due providing much needed revenue, create and save many jobs, and most importantly permit states to eliminate other harmful taxing methods while simultaneously removing the many burdens confronting businesses today.

I applaud Amazon for their Integrity publicly supporting the Main Street Fairness Act.

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