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| NewsFriday, October 19, 2007 11:27 PM CDT |
Twin Cities missing out on taxes from sales over Internet
NORMAL — Two-thirds of Babbitt’s Books business comes from Internet sales. “It’s an important role because it has to be,” owner Brian Simpson said. “If I didn’t do it, I wouldn’t be in business.” While people buying his books over the Internet have to pay shipping and handling, they don’t have to pay local sales tax. Congress has yet to allow municipalities to charge sales tax on Internet sales. That has Normal City Manager Mark Peterson concerned. “It’s a challenge for all communities throughout the country,” Peterson said. “It’s putting a downward pressure on sales tax revenue all over. Internet sales are growing; more are taking advantage of it.” And that takes money away from municipalities that typically use it to pay for day-to-day operations like garbage pickup, snow removal and public safety. While commercial growth has helped offset the Internet sales tax loss in Normal, Bloomington has seen a dramatic dip in its sales tax revenue. Bloomington City Manager Tom Hamilton agreed Internet sales are taking away local tax dollars, but he said he doesn’t know how much and “I don’t know how to find out.” Simpson said he would much rather sell books at his store than over the Internet. And, he isn’t opposed to charging sales tax on Internet sales as long as it would be required for sales from big companies as well as small ones. “I firmly believe paying taxes is the price of having civilization,” he said. Peterson thinks it’s time Congress rethinks its policy or municipalities may be forced to look for revenue elsewhere — like property taxes. |
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