It's that time of the month where I share a novel solution as I for see in having a creative based positive impact on society as a whole. This month's idea is regarding how Internet retailers that withhold paying local sales taxes. How this trend is troubling small to mid sized businesses in America within your own locality. Those small businesses that can not compete with major brand franchised locations nationally with E-Commerce websites. Eventually succumb and close their doors for good. Where the next "Walmart" or other wonder child of a mega retailer is cut down before ever reaching their prime in commerce.
Just recently the State of Colorado sued the famous department store of all your wares of the online retailer of "Amazon". The State of Colorado was seeking retail sales tax dollars that its citizens purchased via Amazon.com. Well "Amazon" rightly so won the case against the State of Colorado because "Amazon" has no physical presence within that State.
Here's the article dated April 5th of this year courtesy of GamePolitics.com "Amazon Beats State of Colorado Collecting Sales Tax"
My concept will require those States within our Union to enact commerce driven legislation for small to mid-sized businesses within a regional locality. That will protect them from a loss of retail customers that are only flocking to Internet E-Commerce web retailers. At least only those Internet retailers that are native to the shores of the United States nationally speaking. Anything that is beyond Internationally will not be covered, its up in the air if Canada could be a party or factor of online retailers?
What I'm proposing is a tax credit but with restrictions so as not to have perpetual tax credits with no end in sight for small to mid sized local businesses. We've had Internet E-commerce for less of a generations time say about 20 years time. In those 2 decades or so all that E-Commerce has hardly ever paid any local sales taxes to a State. Yes, E-Commerce sites are voluntarily obliged to pay sales taxes to a State. However only a few good corporate actors have ever done so, the rest are skirting such a national responsibility. In my opinion unless the culture or the political will ever changes it will take an "Act of God" for E-Commerce websites to ever pay sales taxes in America.
This tax credit for small to mid sized businesses will not apply to national or regional franchised locations. It will not apply to: Restaurants, Convenience Stores, Super Markets or Bodegas, Gasoline Stations, and Health Care Providers. The reason being these are all local commerce needs that could not be superseded by Internet Commerce retail sales. Who do you know for instance purchases a restaurant meal online? Those carry out specials from a national franchised pizza parlor do not count for this tax credit for small to mid sized businesses.
These are the retailer sectors that are covered for small to mid-sized businesses: Computer / Electronic shops, Local Automobile to Recreational Vehicle Dealerships (including Marine Vessels), Furniture Stores, Misc. Gift Shops, Clothing / Boutique Stores, Mattress Stores, Hobby Stores, Auto Parts Stores, Music Stores (Album sales to Musical Instruments), Cosmetics Stores, Jewelry Stores, Camping / Sporting Goods Stores, Florists, Book Stores, Hardware Stores, Travel Agencies, and Office Supply Stores. Those are the bulk of local retailer sectors that are covered by this proposed commerce legislation of a tax credit for small to mid-sized businesses. Only those retailers that deal in "Point of Sale" commerce with customers. Business to business establishments even if they are small to mid sized businesses are omitted from this concept.
Now to the meat of this proposed legislation to include these restrictions for local small to mid-sized retail businesses. The State with guidance from the private sector most likely by a joint committee or series of workshops with legislator staff. Will set up fair benchmarks for each year by sector of retailer commerce be it for example clothing stores to jewelry stores. As noted above in permissible local retailer sectors of commerce. Every local small to mid-sized retailer must apply to the State every fiscal quarter. With their net sales documented following the proper application forms and supporting evidence to the State division of Commerce agency. Those local establishments that qualify for the tax credit which will be devised in partnership with the private sector and the State. Will receive this one leg of support in regards to the pressures encountered of losing local customers to national Internet E-commerce retailers.
The next leg of this three legged stool will be every of the approved local small to mid-sized retailer. Will each receive from the State a per-calendar year scheduled "3 Day Sales Tax Holiday" for their individual sector of retailer commerce. For example all local to regional small to mid-sized business furniture stores can receive a 3 day sales tax holiday in the month of April. To be devised in partnership with the State and the private sector be it a trade organization of furniture stores and such. Other sales tax 3 day holidays will be scheduled for local jewelry stores or any of the approved sectors covered in this legislation.
The third and final leg of this proposed "Bricks & Mortar Internet Commerce Relief Act" will have an added twist to it dove tailing back into the first leg of this tax incentives package. Just like big box national discount chains or supermarket stores provide their customers "Price Matching Guarantees". Any local retail customer that can show a published price that beats a locally advertised item for purchase in retail. Be it publicized in print or online showcased via a mobile device to the retailer establishment. Will be honored by the local small to mid-sized business retailer plus beat the price by 5%. Here's the twist those transactions must be documented by an approved form provided by the State. Where the retail customer signs the form stating they received such a price matching guarantee including the 5% price drop of said item(s). The retailer will take all those sales receipts and combine them into their fiscal quarter application to the State for their tax credit. As denoted above in the first leg of this incentives tax credit legislation. If the retailer qualifies for that fiscal quarter benchmark of net volume sales. Every listed price matched guaranteed offered plus the accompanying 5% price drop discount will be recouped as a bonus tax credit. So the 5% price drop discount on said price matched guaranteed item(s) in retail to the consumer will be passed onto the State.
This commerce legislation is meant to place a foundation of Fairness on top of the bedrock of our capitalism in America. Consider it a form of "Social Capitalism" providing a level playing field to local small to mid-sized retailers in our United States. Versus the Internet E-Commerce websites, be they standalone like Amazon.com or extensions of national franchised retailers (ie "The Gap" or "The Home Depot"). If ever our elected politicians rose to the occasion of forcing Internet Commerce sales tax collections as mandatory. Than this proposed piece of commerce legislation would become a moot point and be apt for repealing allowing it to sunset for good. Without such a form of fairness in commerce Americans will continue to lose the dream of a future success story. Walmart, was once a small business started by a Mr. Sam Walton. If he existed today as a small business he may have succumbed and be forced to close his doors for good before hitting his stride as a global success story.