Marion Business Owners Have Mixed Opinions Potential Benefit of an Online Sales Tax

Could an Internet Sales Tax bill help retailers in Marion compete with online merchants who currently enjoy a mostly sales tax free marketplace?

The consensus among Marion business owners I spoke with is that all depends on if such a sales tax would help make things more fair between online and brick and mortar businesses.

A bill known as the Marketplace Fairness Act is being debated in the United States Senate next week that if passed would allow state governments to reach beyond their borders to collect sales tax from online vendors.

Internet Sales Tax Debate Heats Up (Des Moines Register)

The push for an online sales tax comes at a time when cash-strapped state and local governments are scrambling for revenue and cash-strapped consumers are trying to save money every way they can. The present form of the bill being considered in the U.S. Senate, which suspended debate on it Thursday, includes an exception for small retailers with less than $1 million in annual online sales.

Joan Ackerman, owner of Village Needlework in downtown Marion said she'd be in favor of the bill if it helped bring online prices in line with the prices of her merchandise.

She said that it is a common occurrence for customers to look at a product online and then to come to her store and quote her this price in an attempt to haggle, without factoring in shipping and handling. 

"Customers will come in here and out and out say 'I can get this for less on the Internet,'" Ackerman said.

She said that if an online sales tax were instituted it could help consumers have more realistic expectations for the prices of products sold by brick and mortar business owners, who have to pay overhead, sales tax, and property tax fees.

Phil High, owner of nearby Philip's Diamond Shop & Design Center, said he does not feel he loses a lot of business to online competitors, but he does have some customers who also have sticker shock when they look at a lower diamond price online. High said he would support the sales tax switch as long as it 'levels the playing field.'

"I think it should be fair for everybody, it's all about being fair," High said. "You're supposed to pay the sales tax in state that you're in."

Ted Moser, co-owner of Vball Geara sporting goods store specializing in volleyball equipment, said he could see positives and negatives of such a bill. On the positive side, large competitors of a niche store like Vball Gear that also sell a lot online would likely be forced to raise their prices or would have their prices naturally raised by the addition of the sales tax. On the other hand, Moser said, the online sales tax discount enjoyed by consumers currently might mean less money for them to spend on local retail after their online purchases.

"A possible downside would be if it ended up sending a lot of money away from here to other states," Moser said.

Moser said that the success of a store like Vball Gear mostly relies on the specialized hands-on expertise that the sales staff can offer in the particular field. This natural advantage of retail, especially specialized retail, would not be affected by the sales tax bill either way. Although anything that got more consumers interested in shopping locally couldn't hurt, he said.

Priscilla Steele, of Campbell Steele Art Gallery in Marion, agreed with the notion that retail has to offer something beyond just the sale of goods to attract customers. In the case of the gallery, the owners offer not just the purchase of a product, but the experience of going to a gallery and buying art from vendors who know and appreciate the work.

"We cater to people who still appreciate the immediate experience," Steele said.

Steele said that regardless of the result of the online sales tax vote, the way local retail will continue to be able to compete with online vendors is by believing in the mission of their business, investing in the community, and developing a following that appreciates not just what the businesses sell, but what they are about.

The Marketplace Fairness Act is scheduled for a vote on May 6, a week after today.