We’re lucky to live where we do. It’s a great place to raise a family. And it’s a great place to be in business. Our family has been in the retail jewelry business for 86 years and three generations.
To stay in business, you have to compete for customers. And we are happy to do that. But we’d like it to be a fair competition.
For years, online-only retailers have enjoyed a significant competitive advantage over their local competitors: They don’t have to collect state sales taxes. This means online retailers can create the illusion of having lower prices than traditional retailers — but it’s really just an illusion, because you, the purchaser, still owe the tax. This is not only unfair, it’s bad for local businesses, communities and families.
The Marketplace Fairness Act could set things right.
Online retailers are able to forgo collecting sales tax because of an outdated legal loophole that predates the Internet. It’s time to bring our laws into the 21st century, and the Marketplace Fairness Act is a truly common-sense piece of legislation, despite what some of the misinformation being floated would try to get you to believe. It is not a federal sales tax. It is not a tax on the Internet. It is not a new state tax. It doesn’t increase the sales tax rate. In fact, the law stipulates explicitly that states cannot use it to start taxing goods and services that aren’t already taxed.
All the Marketplace Fairness Act does, really, is give states like Tennessee the ability to enforce their own laws by requiring online retailers to collect and remit sales taxes that are already owed — just like local retailers are required to do. That, and it levels the playing field so the government is no longer picking winners and losers between online-only and brick-and-mortar businesses. If passed into law, it will ensure that all retailers play by the same rules.
This would have a positive impact on local small businesses like ours, as well as the communities where they do business. Our businesses are the backbones of our communities. Right now, a lot of businesses in Johnson City and across the area are struggling. Not only is the economy sluggish, but they have to face unfair competition from online retailers who lure customers to their stores with cheaper prices.
Critics of the bill claim that it is against conservative principles and that it will be burdensome on small businesses. This is all simply false. As I said earlier, sales taxes are not new or increasing. Customers should be paying them whether the online seller collects them or not. This just says that Internet-only companies, which already depend entirely on technology, can use technology to collect and remit the tax like everybody else.
All this, and a commitment to fairness, is why the bill has the strong support of Sens. Lamar Alexander and Bob Corker, Gov. Bill Haslam, Lt. Gov. Ron Ramsey, and Tennessee House Speaker Beth Harwell. They say the income from this bill can help hold down or reduce other state taxes and helps prevent our ever having to consider an income tax.
Tennessee’s local stores — and the communities they support — have waited long enough for a fair marketplace. Fair competition is a good thing. Unfair competition is not.
The Senate has already passed the Marketplace Fairness Act. Congressman Phil Roe has an opportunity to show real support for our entire community by supporting this act. I urge him to do the right thing and vote to support our local businesses. Give us a chance to compete fairly.
Linda Bowman O’Dell is the owner of Bowman Jewelers in Johnson City.