For more than two decades, retailers in the Roanoke region have had to compete with out-of-state Internet sellers who do not collect sales taxes their Virginia customers owe. Here in our area, that means a 5.3% competitive disadvantage for our shops downtown, at Tanglewood Mall and Valley View. That’s a rough deal for hundreds of locally-owned Roanoke businesses and their employees.
There are two key reasons that Congress must pass legislation to provide Marketplace Fairness. First, businesses need a level playing field for the free market to work. Right now our brick-and-mortar retailers collect sales taxes on dollar one, doing their part to help their customers pay their taxes. But, thanks to the online sales tax loophole, online-only sellers outside of Virginia are not required to collect the sales tax. That means that during checkout, the out-of-state, online seller’s prices look 5.3% cheaper than our local retailers. That’s not free market competition.
The second reason we need marketplace fairness is to grow our economies. It’s never popular to fight for tax collection, but there are signs that the sales tax is our best bet to replace other much more harmful taxes. Conservative economists Arthur Laffer and Donna Arduin point out that, by collecting the Internet Sales taxes that are owed, we could lower property and income taxes and add more than 23,000 jobs over 10 years.
Roanoke leaders have fought hard to sustain a thriving retail environment, to keep Market Street vibrant and the local economy humming along. A healthy retail environment means business innovation, steady local jobs, and a vibrant downtown that brings diverse members of our community together with visitors from around the state. In terms of job creation, retailers employ more than the staff in their stores. They employ the construction teams that build the buildings and the folks that maintain them. They contribute to public services including the workers who keep our roads paved, our street lights on and our community spaces beautiful. The Roanoke region’s retailers are at the heart of our community, and right now they need us to speak up for them.
This isn’t just about winning a political fight. The stakes are high for our local economy and for communities across Virginia. This is about supporting local jobs, ensuring that our neighbors can provide for their families. It’s about supporting local entrepreneurs who give our kids the summer jobs to help pay their way through school. According to the Bureau of Labor Statistics, the unemployment rate in Roanoke jumped a full percent from April to June of 2013. Economic statistics like that don’t just mean more unemployed people; they mean fewer opportunities for everyone.
Retail fairness isn’t something we can afford to wait around to achieve. Foot dragging and can kicking from Congress has already cost us local and state revenue. It’s time for Congress to pass Marketplace Fairness as soon as possible.
Joyce Waugh is president and CEO of the Roanoke Regional Chamber of Commerce.