Last year, Pennsylvania took a stand for Main Street retailers all across the commonwealth by closing the online-only sales tax-collection loophole beginning Sept. 1.
After hearing from Main Street retailers just like us about the unfair advantage online-only competitors enjoyed by not having to collect sales tax, Pennsylvania felt it was simply the right thing to do.
We want to thank Gov. Tom Corbett for his leadership on this issue, but the job isn’t done yet.
The government should not be in the process of picking winners and losers in the economy. By allowing online-only retailers to forgo collecting sales taxes — effectively giving them a built-in, government-sanctioned price advantage — Pennsylvania was doing just that.
It was time to level the playing field in the retail marketplace.
We are now almost a full month past the Sept. 1 deadline, and online-only sales tax collection has begun in Pennsylvania.
As Main Street retailers, we finally have the ability to gauge the retail marketplace accordingly; especially considering that we are now heading into the 2012 holiday retail season.
For the first time in a long time, we can begin to assess, with some level of confidence, how many hires we will make and how much merchandise we should purchase for the season, knowing that some of our online-only competition will have to collect and remit sales tax.
Overall, Pennsylvania expects the collection of online-only sales taxes to significantly increase state revenues. Estimates range from $250 million to $400 million a year, considering a 2011 study conducted by economist Bob Strauss, of Carnegie Mellon University.
Main Street retailers also should see more foot traffic that will only add to sales and the use of our own Main Street retail corridors.
We should all want thriving Pennsylvania businesses and communities. We think closing the online-only sales tax loophole is an important factor in creating them.
As local Pennsylvania retailers are finally able to compete on a level playing field, we will all see improved sales, which will translate into increased employment, economic growth, more vibrant communities and increases in sales and income taxes from local retailers and their employees.
The significant, positive impact that the implementation of onlineonly sales tax collection will have in Pennsylvania should be used to foster similar reforms on the national level.
Although closing the onlineonly sales tax loophole in the commonwealth will help millions of businesses and people in Pennsylvania, only a federal solution can truly restore balance and fairness to the larger retail marketplace.
As part of the Alliance for Main Street Fairness, we are standing up for tens of thousands of Pennsylvania Main Street retailers who just want to make sure they are fairly treated as they try to create success for themselves and jobs and growth for their communities.
We are happy with Pennsylvania’s lead on this issue, but we also believe that fairness should not end at our state borders.
That is why we are such strong advocates of the Marketplace Fairness Act and Marketplace Equity Act, two bills in Congress that would close the online-only sales tax loophole on a national level.
We call on our congressional delegation — in particular Sen. Pat Toomey, whose leadership on this issue would be decisive — to take the lead in fighting to close the online-only tax loophole for everyone, and for good.
This column was written by Peter Sides, of Robert M. Sides Family Music Centers in Williamsport and State College, in collaboration with Todd Dickinson, Debbie Keys, Judy DiNardo, Mike Woodlawn, John and Ruth Anderson and Greg Rozman. All are retail business owners from throughout central Pennsylvania.