Business Owners: Tax Internet Retailers To Keep Real Stores Alive

NAPERVILLE, Ill. (CBS) — Local business owners are looking for a more level playing field, and are backing legislation that would require Internet retailers to collect sales taxes too.

As WBBM Newsradio’s Bernie Tafoya reports, David Vite of the Illinois Retail Merchants’ Association says all retailers want is for state laws to be applied equally.

LISTEN: WBBM Newsradio’s Bernie Tafoya reports

He is in favor of legislation proposed by U.S. Sen. Dick Durbin (D-Ill.), which would close a loophole that allows Internet stores to avoid collecting state sales taxes if they do not have a physical presence in the state.

Becky Anderson, the owner of Anderson’s Bookshop at 123 W. Jefferson Ave. in Naperville, says she is affected personally by the loophole.

She told a Naperville Area Chamber of Commerce Legislative Committee luncheon that customers pick her brain on book choices, then go home and buy from some other company off the Internet.

Vite said that the avoidance of sales taxes has led to brick-and-mortar establishments going out of business, which led to a loss of property taxes and added stress to the rest of a municipality’s property tax base.

He stressed to the chamber of commerce committee that collecting sales taxes online was not a tax increase, only the fulfillment of a law that was already on the books, but seldom enforced.

Vite said that Amazon has already agreed to the sales tax, but EBay was still opposed to it on the grounds that it would hurt small traders that used the service.

He estimated that Illinois alone would gain $400 million currently, with the total increasing to about $1 billion by 2020, if the Internet taxes were collected.

Dick Furstenau, candidate for the DuPage County Board and a former Naperville City Councilman, spoke in favor of the legislation, noting the stress put on local municipalities by dwindling sales tax bases.

“The only place left (to get money) is out of your house,” Furstenau said. “It’s the only place left to raise taxes.”

Vite said that the 6.25 percent sales tax from the state included a fixed portion that would be returned to municipal coffers automatically. But he said various local and county taxes would not be collected by the proposed legislation.

The Naperville Sun contributed to this report, via the Sun-Times Media Wire.

  • Carabella

    The state won’t make as much money as it seems because buyers purchase goods from the lowest priced seller. With sales tax added on to the purchase price, buyers will just go to other states to purchase their goods. One thing Illinois is very good at is chasing businesses away.

  • Jim

    This shows why “brick and mortar” retailers are failing. They want to blame someone else for poor marketing skills. The truth is we ecommerce companies DO pay taxes just as these people do. We pay sales tax to any state in which we have a physical presence, just the same as any box store. Either these people backing this legislation have no idea what they are talking about or they are lying.
    NONE of these brick and mortar stores pay taxes on mail order from their brick and mortar stores to an out of state customer, and if they are, they need to find a new CPA. I pay Illinois outrageous sales taxes on any sale made or shipped to an Illinois address. I pay the same business taxes any other store pays. So if Durbin and the other idiots start this state tax war, soon I’ll be paying taxes in all 50 states UNLIKE these people complaining about ecommerce. How about we ecommerce companies get together and start suing places like Andersons book shop for interfering in lawful trade?

    • Jim Hamilton

      Brick and mortar stores can do ecommerce as well, so I really don’t know what they are crying about. The technology train has left the station they can either hop on it or get left behind

  • Business Owners: Tax Internet Retailers To Keep Real Stores Alive – Illinois Retail Merchants Association

    […] Tax Internet Retailers To Keep Real Stores Alive by Bernie Tafoya CBS Radio: WBBM Chicago  (LISTEN), November 16, 2011 The Naperville Sun contributed to this report, via the Sun-Times Media […]

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