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CHICAGO (WBBM) – U.S. Sen. Dick Durbin (D-Illinois) says it’s time to end the Internet sales tax break.
He’s proposing federal legislation that requires Internet retailers to start charging customers their local and state sales taxes, which many try to avoid by buying across state lines.
Durbin says, while Internet customers are supposed to be paying taxes on goods shipped them from out of state, many do not and he says that’s creating an unfair advantage for Internet retailers over local brick and mortar stores that do collect taxes.
Durbin spoke at Barbara’s Bookstore at Roosevelt Road and Halsted Street, where vice president Dave Schwartz said the Internet tax break amounts to a 10% price advantage over his store, which is already facing stiff competition from big box retailers and Internet books.
And the Founder of Building Blocks Toy Stores, Cathy McHenry, says she sees it all to often: a shopper comes in to her show room, compares the available models and then leaves to shop online, where prices are effectively 10% lower because of state and local tax avoidance.
LISTEN: WBBM Newsradio’s John Cody Reports
McHenry termed the online sales tax break the biggest single threat to the success of her business.
Durbin says online tax avoidance is costing the State of Illinois alone, some $134 million per year.