By Reba Campbell, deputy executive director
If you buy something from an online retailer, do you pay attention to whether the sales tax owed to the state where you live is included in the price you pay for the item?
Mostly likely you don’t.
Online out-of-state retailers aren’t required to collect sales tax at the point of purchase in the same way that our local brick-and-mortar businesses are. It may seem like you get a “discount” by ordering a computer online rather than from the local mom-and-pop store on Main Street. However, you are still liable for the sales tax even if the retailer doesn’t charge you for it.
But how many people actually keep their receipts from online sales and remit the tax annually? Not many.
In South Carolina alone, this amounted to more than $254 million in 2012 (the last year we have numbers available) in uncollected taxes due to our state and local governments.
This means state and local governments are losing out on millions of dollars that could be paying for better roads, better schools and better quality of life.
There are bills in the U.S. House and Senate that would fix this inequity. The Remote Purchase Parity Act (HR 2775) and the Marketplace Fairness Act (S698) would level the playing field between out-of-state online retailers and our hometown Main Street businesses.
Keep in mind, these bills do not impose a new tax. Instead they level the playing field between online out-of-state companies and local brick-and-mortar stores by closing the online sales tax loophole. Sales taxes are owed on all purchases, and it is unfair for online retailers to skip collecting taxes, while the stores in our community collect all owed taxes.
Interested in helping level this playing field? Right now, it’s all about getting our Congressional delegation to support these bills. Learn more about what you can do to help.