It should come as no surprise that my earlier posts, Should Internet Sales be Taxed and Will Than Save Brick & Mortar, and How About a Sales Tax Moratorium to Help Brick & Mortar, have garnered considerable attention and discussion on various Linkedin groups evidencing differing opinions and perspectives. One CRE Professional (I have not yet gained their permission to use their name), posted the following response:
"No I don't think Internet Sales should be taxed. Enough is enough with the Government Et AL looking for ways to bring in more money while never even considering cutting a single program. This will not help Brick & Mortar retail as there is a paradigm shift going on which both the ICSC, traditional retailers and the commercial real estate community just aren't getting. Physical shopping has lost its appeal. Even if sales taxes were mandated people will still rather buy on-line those products which do not need to bought at store.
I was speaking with a gentlemen just yesterday about this topic, a non-real estate person and he said he even buys shoes on-line as the customer service regarding returns is phenomenal. My business partner bought new sneakers on-line. The shopping experience is terrible. In addition shopping at a physical store is expensive regardless of sales tax. The mere fact that 75% of the population will have to drive to a retail establishment is time consuming and cost gas. As gas prices go up the incentive to drive to buy something is less. Waiting in lines dealing with poor customer service, not seeing what you want because that particular store doesn't have what you want in their inventory etc. Also walking into a store becomes manipulative. Just the way stores are set up to entice additional sales, pushy sales people, etc. Just look at what has happened to the retail electronics industry. Best Buy is looking to reduce their footprint. HH Greg in my opinion has made a fatal mistake in doing what other electronic retailers have done in the past and take over former electronic big box stores, which had been failures for reasons. The bones of former electronic super stores are scatter all over the landscape. You can now buy your groceries on line and have them delivered. Most clothing I would buy on-line, expecpt for mens suits or ladies wanting dresses etc which need to be fitted properly. Otherwise for casual wear why? The internet retailer has an advantage also with the fact they don't have the overhead of traditional retailers. Should the government impose a per sq. ft. tax in lieu of them having a physical brick and mortar presence? Reading that Amazon is thinking of opening physical stores just defies logic why go away with what has worked exceedingly well. Unless they are trying to placate this whole sales tax controversy.
Will there still be a need for brick and mortar retail yes, but not nearly to extent it has been. Lastly in case nobody noticed, we as a Nation had become over-retailed. The herd needs to culled."
Another commentator, in favor of taxation wrote:
"Of course internet sales should be taxed. Why should I get away with not paying tax just because I bought it on the internet as opposed to buying it from a store that not only is required to collect sales tax but has the added burden of rent, realty tax and CAM expenses?
In Canada in addition to a federal sales tax of 5% on all goods and services, all Provinces other than Alberta (which has significant revenue from oil extraction) have an additional sales tax. Both taxes are a significant and necessary contribution to federal and provincial revenues.
Yesterday I purchased some accessories for my BlackBerry from Crackberry.com which in addition to having a warehouse in the US also maintains a warehouse in the Province of Quebec, Canada. Quebec has its own provincial sales tax as well as the federal sales tax. When I got to the check-out, I was charged not only sales tax but the correct sales tax for the province of Ontario where I live, not Quebec where it was shipped from. This is as it should be.
By contrast, last month I also bought other accessories for my BlackBerry PlayBook. This time it was from the Canadian operation of Amazon (Amazon.ca). The transaction was completed on the Canadian web site but the product was sourced from the US, although Amazon does have a warehouse for its books and some of its other products in Canada. There was no sales tax charged or collected by Amazon. There was no sales tax or duty collected when the product crossed the border (even though the product was made in China (where else), not the US, the latter of which we have a free trade agreement.) The product took a little longer to get here but I didn't pay any tax whatsoever even though Amazon has a physical presence in Canada and I would normally pay sales tax on internet purchases made in Canada from Canadian web sites.
It is not a matter of subsidizing bricks and mortar retailers, it is a matter of fairness (in Canada we don't seem to have a problem with applying sales tax, and applying it appropriately to the place where the product is shipped to, (with the notable exception of Amazon ) and a matter of necessary revenue collection for cash starved governments.
I know you Americans don’t like paying tax, but don't be surprised if this does not get resolved until it is realized that the US federal deficit cannot be meaningfully reduced without a federal sales tax just like Canada and almost all European countries."
And another articulate writer opines:
"After years of actively working on this issue legislatively, ICSC has a full court press on for a Federal Solution to the issue of Internet Sales Tax - Legislation has been introduced in both the US House & Senate - Importantly, with Bi-Partisan Support. The ICSC Strategic Leadership Summit (SLS) is scheduled in Washington, DC the end of March and ICSC members from around the country are incouraged to attend and meet with your congressional members directly on Capital Hill - At least Call or Write them to insure that this critical, yet common sense issue can be resolved.
ICSC has a fabulous new website for those interested and or prepared to champion this issue. Visit: www.21stCenturyRetail.org
I concur with Howard, Kat & James comments but would go further - It's in vogue to discuss "sustainability" and or vision a "sustainable community." The reality is Very Few initiatives can have a more universal and vital impact on all community's throughout the country - Quality of Life, Protecting the Brick & Mortar Tax Base & Jobs, Job's Job's - Consider that One (1) in Nine (9) Hoosier Jobs are Retail Related - This Metric is consistent on a national basis as well. (7MM +/- iPhones/Androids went Live on Christmas Day - Think About That...)
It is Vital that the US Congress & The President embrace the Marketplace Place Fairness Act - By The Way, this is Not A New Tax & It has No Impact on the Federal Budget - Yet of tremendous importance to Cash Strapped States..."
Boy, I just love smart peope who know how to express themselves. It's also amazing how much we can all agree and disagree at the same time. As long as we keep the dialogue going, we all stand to benefit, whatever the conclusions are. Now, if only we could get congress to deal with issues as well.
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