Would Requiring Online Sales Tax Be Good for Ames Businesses?

Local retailers said a federal law that would require online retailers to collect sales taxes no matter what state they are in might bring more business to Ames retailers and perhaps higher prices in some stores.

Tiffany Walker, of Duck Work Wearing, said she purchases a lot of clothing online and if they had to pay sales taxes on items they would likely pass that increase on to customers.

The Marketplace Fairness Act could also bring consignment shops like Duck Worth Wearing more business. People who run businesses through eBay might decide to consign items rather than deal with the hassle of sales tax collections. The measure wouldn't affect casual online sellers.

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The Marketplace Fairness Act would require businesses with more than $1 million in annual Internet or catalog revenue to collect sales tax for online purchases and send them to the state where the buyer resides, according to Slate.

Salesman Ross Hackerson said shops like Skunk River Cycles, with no online business could see more customers in the store, where he works, if people were only saving money by avoiding a sales tax to make a purchase. However, Hackerson said online shops' low overhead and ability to buy in bulk is what allows online bicycle warehouses to offer deep discounts, rather than the avoidance of sales tax collections.

In Iowa, all businesses with a physical presence or sales rep are already required to collect a sales tax on their internet sales. And people are supposed to pay sales tax on items delivered in the state, according to the Iowa Department of Revenue. However few people do.

Nationally, state and local budgets will likely receive the greatest impact as it would increase sales tax collections by $24 billion annually, according to the Huffington Post.