Days of tax-free online shopping could come to an end
PADUCAH — The days of tax-free online shopping may soon be coming to an end and some local people who sell on sites like eBay fear their business may go with it.
A proposal in Congress would require buyers to pay sales tax on all Internet purchases, a plan online sellers fear could drive them out of business.
Since 1992, buyers have avoided online sales tax, thanks to a Supreme Court decision that said if a seller doesn't have a physical location in the state, they don't have to collect sales tax.
As more people shop online, states are feeling the pinch, and losing about $23 billion each year.
A recent proposal requires sellers with more than $500,000 in annual sales to charge taxes. But that's no guarantee what the final bill will look like.
Local sellers disagree on this issue and it's all because of perspective. Some sellers said it's about time for online sales tax. Others said it would only drive them out of business.
Michael and Sharon Houser have lots of stuff on their eBay site but enjoy buying and selling collector's coins the most.
But for the two, it's more than a hobby. It's a way to stay afloat.
Michael is disabled and Sharon only works part-time. They make about $5,000 a year doing this and said a sales tax would ruin them.
"It would knock us out. Yeah, we'd have to quit," Michael said.
Angie Neihoff also has an online store but a totally different perspective. She has a physical store, too, LA Jewelry and Pawn in Fulton, Kentucky. Because of that, she has to charge sales tax online, giving people like the Housers, she said, an unfair advantage.
"It's not fair for one person or a group of people to do their share and you got your others who don't want to help out," Neihoff said. "I just don't think that's fair at all."
She said it's about time lawmakers level the playing field. But the Housers said that'll only cause more harm to small sellers, and force buyers to dig deeper into their pockets.
A coalition of Internet companies like eBay and Overstock are lobbying against the proposal, saying it'll hurt small operations like the Housers.
Meanwhile, other retailers with both online and physical stores support the proposal.