It seems that lately it’s one store closing after another here in the Daytona area. In fact, thousands of Florida businesses and jobs are hanging in the balance, thanks in part to an unfair government policy that drives sales to out-of-state online retailers instead of local Daytona stores. Many retail business owners across the state have already closed their doors and many more could follow if Congress doesn’t give us a fair chance to compete. The U.S. Senate passed the Marketplace Fairness Act this past May by an overwhelming bipartisan majority of 69-27 to level the playing field for all retailers. It’s time for the House of Representatives to do the same.
It’s easy to take local retail stores for granted. You can find them on the streets of every U.S. city, staffed and ready to serve. One out of every 10 people employed in the U.S. has a job connected to retail, whether they’re working in the store or laying a brick-and-mortar foundation. These often-overlooked professionals deserve to be rewarded for their service to the local and national economy. But for the hard-working employees of dozens of my competitors, and for many other retail professionals around the country, the past few years have brought a pink slip and tough times instead. These folks deserve better than a Congressional cold shoulder.
When you buy something online, you’re legally obligated to calculate and remit any uncollected sales taxes to your state. That piecemeal tax collection policy has produced a tax payment rate in the low single digits. And because Florida hasn’t started auditing private citizens for these unpaid taxes yet, consumers often assume the missing sales tax charge is a discount, leaving me with an unfair competitive disadvantage. Even if I beat my competitors on price, cash-driven consumers will still think they can get a better deal overall by going online and dodging the sales tax.
Don’t get me wrong, I love competition. I’m a naturally competitive person and I want to win sales and earn my customers. But at the end of the day I have to collect sales tax and my out-of-state competitors do not, and that’s not what I would call free market competition. So when a customer goes out and gets a tax dodge internet price and slaps it down on the table for me to take or I’ll lose the business, I end up paying the sales tax myself. That’s money that might have otherwise gone to investments in staff and infrastructure that keep us thriving and contribute to the local economy. Not because an out-of-state website seller is more competitive than me, but because Congress hasn’t closed the outdated tax loophole that continues skewing our retail marketplace.
The current situation is bad for customers, bad for staff, bad for managers and bad for business owners. Doing nothing about this problem is a drag on the economy, hurts small communities, forces states to find other ways to get revenue, and keeps government bias distorting in the retail market. The Marketplace Fairness Act would close the government loophole that created all these problems, and it would level the playing field so every retailer gets equal treatment under the law.
Doing nothing is not an option. Unfair competition from website retailers is slowly bleeding Main Street businesses dry. If we do nothing, if we say nothing, and if Congress refuses to pass, or even discuss, the Marketplace Fairness Act, a lot more folks in Daytona and all across Florida are going to be feeling our pain.
Rose Ann Tornatore is the owner of Wholesale Lighting, Inc. in Daytona Beach, FL.