Main Street store owners across America are losing out on business because of their tax exempt competition—online marketplaces—according to Sen. Dick Durbin (D-Ill.) in a recent American Farm Bureau Federation Focus on Agriculture column. Durbin said consumers often visit local businesses to window shop but purchase products online when returning home to avoid being taxed, a term local businesses call “showrooming.”
To keep local businesses afloat, Durbin, along with Sens. Enzi (R-Wyo.), Alexander (R-Tenn.) and Heitkamp (D-N.D.), introduced the bipartisan Marketplace Fairness Act. And despite opposing views, he says the bill is not calling for a tax increase but will simply allow states to require merchants who sell online products to collect sales tax from consumers within that state—just as Main Street businesses do each day.
Taxing customers for online purchases at the point-of-sale would mean $23 million for states, allowing them to avoid increases through other types of taxes such as property taxes. Durbin added that some states would also invest in vital programs for residents and critical infrastructure.