A customer goes into a local business to check out a product. This person finds a computer, makes an online purchase of that same item and avoids paying the sales tax.
Is that fair to a North Dakota brick-and-mortar business that employs our state's citizens, invests in the community and helps drive the local economy? I don't think so.
That's why we need The Main Street Fairness Act. This legislation will close the loophole that gives online retailers a competitive advantage over the local businesses.
The Main Street Fairness Act is not a new tax or an "Internet" tax. It does not ask consumers to pay anything more in taxes than what is currently legally required.
Right now, consumers who make purchases that are not taxed are required by law to report and pay the sales tax that would be due. Most consumers are either unaware of the legal requirement or choose to avoid the obligation altogether.
Competition between local and online retailers is fierce. Online sales continue to increase each year. Consumers like the convenience of shopping online and the online retailers provide a valuable service to their customers. But let's be clear about one fact: Main Street businesses are the backbone of the American economy.
Twenty percent of our nation's jobs are directly tied to the retail sector.
A number of online retailers are already voluntarily collecting sales tax. However, there are many more online retailers that do not collect the sales tax, which means consumers are legally obligated to report and pay the sales or use tax to their respective state.
Currently, the main street business collects sales tax. If the Main Street Fairness Act should pass, states will be able to determine for themselves whether or not they will require the online retailers to collect sales tax.
It would move that responsibility from the consumer back to the retailer just like their counterpart brick-and-mortar businesses. It also removes the legal consequences from the consumer for not complying with the sales tax laws.
This issue is simply a matter of fairness for all retailers.