Letter to the Editor: Online retailers have unfair advantage
As a lifetime resident of Maine, who grew up in a small community like many of you, it is important to me to look out for my friends and neighbors. Recently, it has been brought to my attention that our Main Street businesses have been victim of our government picking winners and losers.
These local businesses have been in town since I can remember and are competing on an unfair playing field with online Internet giants such as Amazon.com and Overstock.com. These e-giants are not held accountable for the sales tax that they owe us.
This creates a 5 percent price advantage for these companies, which ultimately forces family owned businesses to close their doors. The businesses on Main Street are the ones that pay property tax and invest in the community, not the companies that are based across the country and don’t have real estate or property investments here.
We Mainers need to look out for what is best for our own community regardless if a product is purchased from an in or out of state vendor. These online retailers should be subject to the same tax laws as Maine based businesses and should be forced to collect them for submission to the State of Maine.
A fair tax code change called E-Fairness should be passed to stop these online Internet giants from continuing to take advantage of this loophole, which is hurting our community. We need to stand up for Main Street, not an out of state corporations who skirt the law to the detriment of Maine businesses.
Lance Harvell
Farmington
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Better idea, get rid of the sales tax in Maine. Maine already is a great shopping destination, lets start competing with our New Hampshire friends.
But Hutch how will we make up the revenue?
Cut the spending, Cut more spending, and Cut even more spending, and freeze State employees salaries for 7 years, including the university system, Allow former state employees to collect social security benefits they earned in the private sector (they can retire earliar generating openings in the work force, and spend more money).
Allow someone to build something here in Maine, (east-west highway maybe, new nuclear power plant or two) if you build it they will come! ("they" meaning people to work and live here increasing income tax revenues in this state) we really should be concerned with the declining population.
While internet sales may seem like an opportune source of additional tax revenue, it may not be productive or justified.
Local businesses pay local taxes to support the local infrastructure they depend upon. Internet businesses pay delivery services which pay taxes to support the highway and other infrastructure they depend upon. The delivery charges often outweigh the taxes of a comparable local purchase, even if their hidden in the cost of the order. So we have a pros and cons situation, I don't think that it's unfair any more than when people choose to drive to new hampshire to go shopping.
But even if it were justified to tax what people purchase online, it may not be productive. As many tax increases do, this one could actually hurt productivity. Many Maine-based internet companies could suddenly be subject to paying taxes in any state that they sell to. That could set the stage for a very messy tax season and a lot of closed doors. Until the increase is passed it would be unclear what effects it would have.
I'm glad to have Lance as our representative, but I hope that he rethinks his support of this legislation and continues to represent us well.
Tax, tax and tax some more!
Whoops, I meant "they're", not "their", sorry English majors.
Hutch has good ideas. Notice that the state would have a hard time taxing out of state retailers. And what about ebay and other out of state sellers? It is discouraging to see how cuts in government spending are so fought against. Cut spending, eliminate the sales tax, and don't take more of the means we have to to excercise our freedoms.
It's not just the sales tax that might keep me from an in-store purchase, it's the price. If a hardcover book I want costs $50 at a local retail store and I can get it for $30 at Amazon.com, that's still a huge savings even if I have to pay sales tax with the online retailer. I shop locally quite a bit, but I can't ignore a $20 savings just to support a local business. We don't have that kind of extra income.
Maybe downtown businesses need to offer something that's unique... something that people will go out of their way for (off their computer). It used to seem like if you wanted to get something that you couldn't get in town, it was a great excuse to travel to the big city. Their's also the old saying, "If you can't get it in Franklin County, you don't need it." I think if downtown businesses can change with the times, rather than use a tax incentive as a crutch, they'll be better off in the long run. As a case in point, Reny's now provides the much loved "Maine Adventure." Mainers take pride in their ability to find a good deal, and Reny's provides an environment that allows them to do so. And, even though you can find the exact thing you're looking for on Amazon, a lot of people will check their local Reny's first. Most of the products they stock might not be available the next time you're in town, thereby creating the incentive to snatch it up when you can. You can't really kick yourself over an impulse buy, cause It was probably a hell of a deal anyways, right...
I think Lance has a good idea. The sales tax advantage for online retailers was reasonable to encourage inovation but it's long overdue for change. Don't forget that this is not a new tax. The tax has always been due to the state but the online retailers were exempted from collection. The problem is that the feds gave the exemption and the state loses the revenue. Sort of like an unfunded mandate.
taxes aren't really the issue. amazon and other large retailers, not necessarily online ones, can buy in huge quantities and put tremendous pressure on suppliers and, in the case of books, publishers. small businesses can't compete with that advantage with or without taxes. when people shop local, they pay for the experience of buying goods from people who know what they want and can provide personalized service. mr. harvell should be admired for taking a stance to support local businesses at a time when politicians on both sides of the aisle have effectively abandoned them. but unless he wants to propose some sort of modern antitrust laws he might be barking up the wrong tree.
Lance,
I know I am a little odd but I do very little shopping online. For me it is cheaper and easier to buy local when I can. But somethings I can't buy in the area so I go online. First I go to Wal-mart and get a prepaid card (a small fee to get the card), then I make the order with the shipping cost (at the site I order from for $100 order they charge $14 shipping, it would only cost me $5 in taxes) and then I wait and hope it is what I wanted. Buying local for me is the best way to go if the products are in the stores.
Lance, I'm all for increasing taxes on sales and purchases whether it be on-line or new taxes on some of the foods and beverages that contribute to obesity. However, more needs to be done to lower the unfair income taxes this State imposes on it's citizens. They take away our incentives to work harder to achieve greater income. Why do we need to be penalized for working hard and collecting a paycheck? Maine's income taxes are excessive and they are a contributing factor to why many corporations and wealthy retiree's locate and re-locate to neighboring New Hampshire. I am still very upset the Republicans worked so hard to repeal the new tax law that was passed by the Democrats a couple years ago that lower these top income tax brackets. Who's side are you guys on anyway Lance?
Sorry folks. While I feel for the dowtown stores, this is, after all, the 21st century. Just as the downtowns suffered across the US when automobiles, good roads and cheap land (and gas) grew the suburban malls that supplanted the downtowns, so too, do the times change that make online shopping the future for all of us. Their overhead advantages allow them to sell far cheaper, and as gas goes to $5 a gallon soon, the public will find that another huge reason to save time and money by shopping at their keyboards. Its inevitable, regardless of any tax policy.
And for the Bill Reids of the world, if we follow Hutch's dream world, and cut cut cut, Bill will be trapped on CC Hill in NS, as the road returns to dust and mud when there is no money to keep it up. Amazon would be the only store he'd have access to. Alas, Bill, the roads do not pave themselves for free, as you seem to believe. Nor do the hospitals, schools, public services etc that we all depend on appear and get maintained for free. And if either of you bother to check, the salaries of state workers pale when compared to similar work in the private sector throughout the country.
I also wish Lance would consider the wider view of policies in the state and nation with regard to the big corporations with the same mode of thought as he does for local small businesses. The problems on the wider scale for Maine and the nation with corporate power are much greater than this small issue of local sales taxes.
Being both brick and mortar store and an online retailer, I feel putting a sales tax for purchases made online would be detrimental and burdensome to smaller retailers like myself because of the increased amount of paperwork of sending checks for sales tax payments to the 50 states every month. But let us face a few facts here. When people say that downtown merchants should offer unique items that can't be found online, my response usually is that almost everything you can buy anywhere at a store can be purchased online.
If people want a downtown that is beautiful and has cute and unique shops, they need to support these shops year-round, not just a couple months out of the year. If you want don't want offices and banks to be the only places to visit in downtown Farmington or Rangeley, then support your local merchants. Make a choice to shop locally. If you look at most towns around, Farmington and Rangeley are the only ones that have been able to hold on to their downtowns. Renys would not be in Farmington if they were the only store in the downtown area because they wouldn't be able to survive on their own. Neither would any other store be able to survive on their own.
Buying locally means that you are providing jobs for people locally. If there are things that you would like to see for sale in the local stores, talk to the people in the store and let them know what you would like. It is a safe bet that one of the stores in downtown may carry it or could get it in for you. I do that quite often for customers that make special requests.
I have also sold items on Amazon but no longer do because of their policies. They basically take 20-30% off your sale and pocket that money and then set your shipping price. So let's say an item costs $9.00 to ship, Amazon might give you $4.00 towards shipping and the rest comes out of the left over amount of money you made on the sale, which ultimately comes down to not much at all.
Basically, shopping locally is a choice!
Adding sales tax to an online retailer isn't going to solve the online versus local problem. Customers need to be the ones to solve that problem and not the government.
I personally wouldn't care if I had to pay sales tax on items I but online. Usually when I buy online it's because I can get a better price or it's something I can't get in this area, sometimes it's something only available online at a specific website. If I could get it around here, either in Farmington or somewhere else in the state I would. Generally when I have the extra money to get something I can be impatient and really don't like waiting and would rather just have it now. That's just my opinion.
Why don't retailers tell their customers "We'll pay the sales tax." You buy it at the price quoted and the sales tax will be handled by the business. That would solve it.
Imagine the difficulty of ,say, a seller in Idaho sells something to someone in New Sharon. How does the Idaho seller, who owes the state of Maine $0.85 for sales tax for the item, pay it? And how could Maine muscle that seller in Idaho to pay up? What a nightmare! Imagine how much more State govenment we'd need to collect such taxes and wouldn't it chew up any more money we'd gain by such a tax?
Hey Chief,,,, If gas goes to $5 or $7 a gallon,,,,Shipping Costs go up accordingly when you order online.
CMON,,,,,you speak as if those nice folks from away will just overlook that added cost,,,,NOT GONNA HAPPEN,,,
THIS will hit home after you've spent all this time processing your online order ,,, then when at the very end the little detail called shipping costs comes into play....(and you thoought you were home free,,,nope!)
The increased gas prises get passed along to the customer.
I know one in a million offer free shipping but you can bet your leaky mind that those costs are hidden somewhere,,,,,,,,,,,,,,,
THIS is the way the whole world works,,,
But the local retailer can make a decision,,,,,,,,,,to your benefit if it's a nice day or you are a REGULAR CUSTOMER....
The only sure thing is change. The pendulem swings.
I think it is you who is confused about which way it is swinging these days.
Some of us can see a bigger picture than throwing our money over our neighbors heads to some foreign or distant corporation. They are fine if you have to but,,,,,,,,,cmon man think a little here.
More and more of us see the value in supporting our friends and neighbors,,,,,
At least you have the opportunity to ask a real person your questions and you never know you might recieve an instant discount from a local,,,,,,,,,,,Just out of customer appreciation. Try that with AMAZON.
THIS,,,,,,,,,,,,IS MY FUTURE.
Support Local Good and Services.
They reciprocate and it's called,,,,,,,Community. This is a good thing,,hello. (again,,,,,,,,,THIS is my future).
Sorry yours is so distant and inflexible. But to each their own I guess.
Hope your internet dont crashhhhhhhhh,,,what will u do???
Bill Reid, that's how it's done in countries with a VAT tax. The customer pays the price on the item, the tax is included, and not specified. They do it that way on purpose, hoping the dumb customer never thinks about that hefty tax he's paying.
Any politicians, accountants, lawyer listening? Is it even legal for a retail merchant to price his wares "sales tax included"?
A good start would be to just stop going to Wal-Mart
My wife, who does our income taxes, tells me we have to pay our out of state sales taxes here in Maine. We must include it in our annual taxes. If we don't give an annotated accounting, the state charges us for an estimated out of state sales tax. I did not know that. We already accomadate our taxes on out of state taxes, even if we don't buy anything out of state. I bet few, very few, buyers of out of state things know this. We really have too much government.
Please note, that I care about local businesses, my neighbors, and try to shop local whenever possible. However, I've so often found that they do not provide the personal service you'd expect, have gone to local stores when they are supposed to be open by the signs on their doors and are not..........and when I do shop online, I rarely pay ANY shipping cost. Amazon ships most goods free, as does LL Bean and scores of others. And, if they don't the shipping costs often are less than the fuel expense (at $3.50 a gallon) not to mention the time spent, vehicle wear, etc.
Sorry you nostalgic folks --- this is the reality of today's world. My internet and computer are at least as reliable as Maine road conditions, ice, snow, the online stores operate 24/7, etc. etc. Collecting 5% sales tax from Amazon will change nothing.
Take a look at your State of Maine Income Tax form you fill out each year. Maine residents ARE required to pay sales tax on out-of state purchases including on-line purchases from non-Maine retailers. If you don't buy ANYTHING except locally, you pay nothing in additional tax, enter zero on line x.
The only difference is that Maine (you and I) requires Maine retailers to collect the tax and turn it over to the State coffers and we ask our own Maine Revenue Service employees to collect the rest directly from ourselves, the buyers.
If nobody ever lied or cheated on their Maine income tax, the lack of sales tax would not be an incentive to buy on-line.
I think Mr. Harvell has been shopping "on line" and just realized that there is no sales tax charged. I am a supporter of Representative Harvell's beliefs on many topics, but on this one I think he would be better off to spend his time barking up another tree. I appreciate the sentiment, but let it go.
To the Downtown businesses - I am tired of the constant collective whine that comes from you that no one shops local. Perhaps if your hours were adjusted so that the "working man" could patronize your store than you would receive more customers. Not opening until 10 AM and closing at 5 PM makes it hard for someone who works a day shift that gets out later than 3:30 to shop in your store. I don't expect you to open at 6 and close at midnight like the box store, but if you aren't open when I am available to shop I have no alternative but to give my money to the box store.
Call me a cynic: Just a question for you: do you work 7 days a week - because most shops are open 7 days a week, especially after the winter months.
So, Chief, UPS must not be charging Amazon and other big boys any shipping charges? I wonder if cost of shipping might be buried in the price???
I have an Amazon Prime membership. Free 2 day shipping, free streaming movies and Amazon's prices are still cheaper a majority of the time.
Chief and Cynic- by all means keep spending your money online and dont leave your house. I'am sure most local retailers would consider you one of the very few customers that they would just rather not deal with. Some customers are just plain impossible to please and with attitudes like yours its better for everyone if you just stay in your basement and gripe on the computer and feel like a hero because you saved a few bucks buying from Amazon, not your neighbor.
I usually join a conversation most of the time probably well after most have moved on and forgotten about this topic. I need awhile to chew on things.
On this subject, I don't know. I can agree there needs to be a level playing field, I also agree that local merchants need to do more than repeat the often doted slogan "Buy Local", to me it's about what are they doing to make me want to come to their place of business, convenience is a big piece of shopping online. No traffic, no parking issues and prices are comparable if not better online.
When I bought a new PC recently, I automatically went to Dell and designed what I wanted and didn't have to settle on what was offered at a local business.
But I guess getting back to the main topic, taxing online purchases. I think the best option to level the playing field to me in that regards is to eliminate Maine sales taxes. I think the politicians need to stop looking at what else they can tax and start looking at ways to relieve our tax burden. How, can they sit there in Augusta and keep looking at ways to raise taxes and at any mention of proposing to cut taxes, it’s whoa to the children, the elderly and we’ll have to cut fire and police protection, when right next door is N.H. with no sales or income taxes and they for the most part don’t seem to be doing too bad.
I'm with most people that I don't mind paying my fair share of taxes if I know everyone else is, which we know not everyone does and this doesn't mean just the wealthy, a lot of middle class and poor don't pay their fair share of taxes and if our tax dollars are used wisely, again the general consensus is they are not.
True, Bruce, when I mention to some friends I'm "doing my taxes", they don't blink or respond,
'cause they are not paying any- working steady hours, steady repeat customer schedule and
all under the table. If there was no sales tax, they wouldn't pay any taxes - yet, they have all the toys!
@ Timmy, I'll have you know that 1) I don't have a basement 2) I am a very easily pleased, courteous customer, and 3) I bought 95% of this past year's Christmas gifts locally. Do you know how I was received in the local stores other than Trask's and Mooseville? The local merchants treat their customers as if they are a bother, a nuisance, yet another Christmas shopper they have to deal with. I am clean, well kept, smell just fine, and as I wrote earlier, easy to please. Customer service is not hard- simply treat your customers as you would want to be treated. Don't flip the sign to closed as I am walking up toward your door -as was the case at Twice sold Tales one evening last July. The kicker? It wasn't even 5 PM yet. She needn't worry- Mr. Paperback is open until 8, and they love my money. If any of the downtown merchants should ever wonder how to treat their customers, take a trip into Trask's and look around. You'll receive a smile, a hello, and a thank-you when you leave.