Merchants to Congress: How About e-Fairness?

Jul 22, 2013

Brick-and-mortar store owners across Pennsylvania are trying to put pressure on Congress to make online retailers collect state sales tax.

Right now, such vendors don't have to collect sales tax from out-of-state purchases, and many customers are unaware they're required to report the tax on their own.

Pennsylvania-based retailers say it's a loophole that gives online-only vendors an unfair advantage, allowing them to undercut prices at brick-and-mortar stores.

The lucky businesses have survived. They may even see a lot of foot traffic. But many of those customers are doing what the Pennsylvania chapter of the Alliance for Main Street Fairness calls "showrooming." phenomenon: customers walk in, look around, get a price. Then?

"Leave, and go and buy it online," said spokesman Dan Hayward. "All we're asking for is that that is no longer a government-sanctioned tax advantage for those online-only retailers."

EBay is mobilizing its sellers to oppose federal legislation pending in the U.S. House. The online shopping site says requiring small businesses to collect and pay sales taxes nationwide is too much of a burden. But Hayward counters those claims are overblown.

Greg Rozman, owner of Rozman Brothers Inc. store in Harrisburg, said pushing the online sales tax issue isn't about helping small business stand up to big business. He's holding his own with stores that sell what he does: TVs, appliances, furniture. What frustrates him is the fact that some businesses are selling online and avoiding state taxes, while other businesses have to pay, and charge higher prices as a result.

"We're not as affected, I think the appliance business," Rozman said.

He said his customers are looking for an appliance, as well as a no-fuss delivery and installation. Other businesses aren't in the same boat. In his travels to D.C. to advocate for an online sales tax bill, he's met a musical instrument store owner.

"Everything he sells, other than baby grand pianos, can be shipped online, at a low expense," Rozman said. "A trumpet, a violin — these are lightweight things, that sell for thousands of dollars and can (be sent) online."