Regulate Internet Sales Tax Now

By Stephen L. Burger, CPM®, CRX, CSM

Eleven billion dollars: That’s the amount of sales tax revenue lost by the 50 states in 2012. The source of that loss was Internet sales by online retailers who do not collect taxes on purchases. Unfortunately, the US Supreme Court has refused to hear a case (Direct Marketing Associates vs. Brohl) that might have set a precedent for the ongoing issue of how to deal with Internet sales.

Their refusal frankly amounts to a body blow for brick-and-mortar retailers and, by extension, the property managers who handle shopping malls and retail centers. As IREM Government Affairs representatives Beth Wanless and Andrew Lomo explain in an IREM blog we are currently running, the case “challenged a Colorado law that requires out-of-state retailers to help facilitate tax collection by providing information on purchases made by Colorado residents.”

According to Wanless and Lomo, DMA v. Brohlwas seen as a way for the court to revisit the 1992 caseQuill Corp v. North Dakota, which found that a state can only collect sales tax from a business if it has a physical location in the state.”

It should be noted that that 1992 ruling was cast when web sales were in their infancy and no one could then see the sweeping--and growing--power of Internet purchases--hence the $11 billion in lost tax revenues. In fact, the writers state that some retailers actually mislead customers with claims that they “can avoid sales tax by purchasing from them,” while in fact, “the customer is still legally obligated to pay the use tax as part of their annual state tax returns.”

We stand by IREM in its position that regulation would “level the playing field for our members who manage shopping centers and malls.”

No one enjoys paying taxes, and certainly--especially at this time of year--everyone wants to feel the buzz of snagging a great bargain.But right is right, and what benefits certain online retailers hurts your local businesses.So take a moment from writing holiday cards and write your congress people in support of fair sales practices across the board.

And certainly, from all of us at EBMC, the best to you and your families for a safe and happy holiday season.

Steve Burger, President

As president and COO of Eugene Burger Management Co., Steve Burger is directly responsible for the overall quality, depth and consistency of management services provided in all 15 regions in the EBMC coverage map.

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