Bill proposing online sales tax gets mixed reviews
Lawmakers are currently debating a bill that would allow states to collect sales tax for online purchases.
Right now, states can only require businesses to collect online sales tax if there is a physical store in the state.
Under the bill, if a shopper makes an out of state purchase online, the sales tax collected would have to be sent the state where the shopper lives.
Last year, Wisconsin had $142-million of uncollected sales tax for online purchases according to a new USA today report.
While that could mean more money out of consumer’s pockets, it's not necessarily a good thing for every business.
Kroner’s True Value Hardware Store in La Crosse is one of the last remaining stores of its kind.
“They're a dying breed, but we're trying to plug along,” said Bill Kroner, manager of the store.
The store has been selling general goods for more than a century.
In 145 years, everything from the doors, to the drawers and the creaking floors have all stayed pretty much the same.
“We updated the lighting a little while ago,” said Kroner.
Technology has helped business run a little smoother, but the store doesn't have enough resources to maintain an online website.
Kroner said charging sales tax for online purchases would help businesses like his compete.
“It would help us as a retailer, and make it a more level playing ground for someone offering someone the same thing I've got, I have to charge them 5 and a half percent tax,” said Kroner. “Why shouldn't they?”
At Dave's Guitar Shop in La Crosse, it takes Tim Mullally only seven minutes to snap a picture of a product and put it online.
“And there is that guitar on our website,” Mullally said after finishing a post.
That's actually more time than it takes for a product to sell anywhere in the world.
“There have been times where I literally hit the upload button and there has been a purchase for that guitar within less than a minute,” said Mullally.
About 80 percent of the business is online.
“It's going to hurt,” owner Dave Rogers said about the bill. “It’s going to sting yeah for sure.”
Rogers said incorporating online sales tax would make a huge difference in business.
“If you added 5 percent on that, the money collected, if its collected for the state would be huge,” said Rogers.
He said the change would take a little getting used to if the bill passes.
“We’ll all suffer a little bit and orders are going to lag, and then people are going to realize well if you want it, you’ve just got to pay,” said Rogers.
Rogers said theoretically, it makes much more sense and save more money if he only ran an online business, but he said there is some value to having customers come into the store.
Kroner said he may start selling products online in the future in order to keep up with business.
The bill passed in the Senate on Monday with a 69 to 27 vote.
It's now on its way to the House where some lawmakers say it will have a tougher time getting passed.
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