The era of tax-free internet shopping isn’t over, but it’s on borrowed time.
As of Feb. 1, online shopping giant Amazon.com is collecting 7 percent sales tax from Mississippi residents, according to a deal worked out last month. The change is expected to bring in between $15 - $30 million a year to the state treasury, a fraction of the estimated $300 million officials say Mississippi loses annually in online transactions.
Many other states have worked out a similar deal.
The move comes as Mississippi lawmakers prepare to consider passing laws and joining Alabama and others in litigation over online sales taxes. Amazon began collecting what is technically a "use" tax for Mississippi on Feb. 1.
This move no doubt comes as a downer to customers who enjoy the year-round tax holiday on online purchases, but there’s an issue of tax fairness here: Businesses that pay to maintain storefronts or offices, including many mom-and-pop entities, have no choice but to collect state sales taxes. They’ve lost part of their market in recent years to the allure of tax-free shopping online.
It’s no secret, too, that states are strapped for cash and taking avenues like this are a good way to recoup some of the tax loss that is being taken out of local economies.
As yet, the step-up in collections doesn’t apply to eBay and many other online businesses. Many other states were able to force Amazon to the table because of a court ruling requiring retailers to remit sales taxes to any state in which they have a physical presence.
Under current state law, municipalities will not receive a portion of the tax collected by Amazon on sales made to Mississippians. But Ways and Means Chair Jeff Smith, R-Columbus, said he expects legislation to be considered during the 2017 session to provide local governments a share of the windfall.
The only equitable way to collect sales tax is to place that responsibility on the seller, not threaten everyday consumers — who already are paying federal, state and local taxes — with perjury or tax evasion.
This move just seems like common sense and a way for the state legislature to help the small business owner in Mississippi.
Joseph Brown is the editor and publisher of The Star-Herald. He can be reached at jbrown@starherald.net
