Sunday, April 28, 2013

Internet Sales Taxes

There's been a lot of chatter lately about charging sales tax on internet purchases, since Congress is currently considering measure to levy taxes on online sales. I'm sympathetic to both sides; my parents own a small retail store, and I'm and avid online shopper. The merits of the bill aside, I'm skeptical that this will be the saving grace that brick and mortar retail is looking for.

I've been shopping online since I got my first debit card at 16. At first, it wasn't because it was cheaper; it was because I  didn't have a car, so how else was I to get to the mall? The lack of sales tax might have been a bonus, but I would have shopped online regardless. I continued shopping online because it was a cheaper and easier way to get used books, because my favorite clothing and yarn retailers are online-only and because online stores are far more likely to cater to my niche, obscure tastes. Brick and mortar stores necessarily cater to the broad middle, selling the products most people are most likely to buy. This is particularly true if you don't live in a large city like New York. And my tastes have never aligned with the broad middle.

For me at least, online shopping has been great:

I could shlep into Manhattan and visit a few cookware shops trying to find a Pullman pan, but is not only cheaper, they will ship it to my apartment, saving me an errand.

I could comb thrift stores trying to find used clothes I like, or I could have Ebay e-mail me daily with new listings matching "Boden skirt 10," allowing me to peruse and bid at my leisure.

I could comb through the library's offerings at the annual book sale, hoping my taste matches that of the locals (it often didn't) or I could hit, and find a used copy for $5, shipped.

I could visit a yarn store or three, hoping they carry tiny crochet hooks, or I could get a full set on Ebay, shipped from the manufacturer.

It's worth noting that in three of the four above examples, I ended up purchasing the items from small businesses, with Ebay or AbeBooks facilitating the transaction. Internet shopping does not mean I don't spend my money with small companies, although it usually means I don't spend it with local ones.

For the last three tax years, I have conscientiously reviewed my online purchases, totaled them to the best of my ability, and paid use tax on the amount, so this bill is unlikely to change my out of pocket costs. Now, obviously everyone isn't as rule-abiding as I am, or this bill wouldn't be before Congress. But this means that I have been taking sales tax into account when making online purchases for the last few years and online purchasing has still won out, time and again. I think that if traditional retailers think Amazon et al.'s only advantage is a lack of sales tax, they are likely in for a rude awakening.

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