The Norman Transcript

May 8, 2013

U.S. Senate steps up to level sales tax


The Norman Transcript

NORMAN — Many pieces of federal legislation are misnamed, oftentimes to help sway support and make for better political campaign sound bites. The federal Marketplace Fairness Act doesn’t fall into that category.

Senators on Monday approved the bill, which forces online retailers who have no physical presence in a state to collect and remit sales taxes to the states where customers reside.

It’s a victory for traditional retailers who have complained for years about the unfair advantage enjoyed by online sellers. The Senate voted 69-27 in favor of the measure. Republicans and Democrats endorsed the bill. Oklahoma’s two senators, Jim Inhofe and Tom Coburn, voted against it.

Oklahoma officials estimate they are losing out on upward of $200 million a year. No estimate has been made on Norman’s losses, but Oklahoma City estimates it loses $10 million a year to online sales.

Nationally, one study put the tax losses for states at $23 billion on an estimated $226 billion in Internet purchases.

Customers, who formerly bought products in local stores, often use traditional stores for showrooms to check out products before purchasing online. Even worse, when the product fails, the local stores that were bypassed for the sale become a return station.

Buyers who turn to the Internet for purchases use the same amount of police and fire services, drive on the same roads and play in the same parks as those who buy down the street.

The measure now goes to the House. President Obama has indicated his support for the bill.