Malarkey: Editorial misses several points
I am writing in response to Nov. 23 editorial "It's time to level the retail playing field." There are several points that the editorial completely misses.
First, the statement of sales tax providing an 8.75 percent advantage is technically incorrect. North Dakota levies a use tax in an effort to deal with this exact issue. The purchaser is responsible for paying use tax when the vendor does not collect sales tax. The fact that a miniscule proportion of individuals actually pay use tax is obviously an issue, but our state doesn't seem overly concerned or they would attempt to enforce it or at least make it easier for people to self-report.
Second, while out of state companies do have a negative impact on local businesses, I disagree with the comment that the out-of-state companies contribute "essentially nothing" to the community. According to Forbes, since 2007 ecommerce has created 355,000 new jobs in the U.S., while 51,000 jobs have been lost in the general retail sector. The average pay rate of these new jobs is generally higher than the jobs that have been lost. Ecommerce companies also allow access to goods and materials that are otherwise unavailable from local retailers. While the impact on individual towns and cities may be slightly negative, the overall impact on the country is a significant net positive.
The editorial also fails to take in the convenience and selection benefits of online retail. I know that this is the most significant reason I have switched large portions of my purchasing to online. I can waste an hour of my life, wear and tear on my car plus money for gas driving all over town, hoping they have what I want in stock at a reasonable price. Alternatively, I can hop online and in five minutes have exactly what I want show up at my door in a day or two.
It isn't uncommon for online prices, even accounting for tax and shipping to still be 10 percent or more cheaper than local prices. I've seen cases where local prices were double or even triple the online price. In those cases, the local businesses are either gouging their customers or are completely out of touch. Either way, they are unlikely to survive. There is also nothing preventing smart local businesses taking their businesses online, greatly expanding their customer base. In fact, Amazon makes this easy for businesses to do.
Amazon in particular used to be very outspoken about not having to pay sales taxes. They have changed their tune recently and now support the same plan espoused in the editorial because it is now to their advantage to make it harder for other companies to go online.
Big business is always in favor of regulatory capture. Nothing like using the government to make life hard for your potential competitors.
In short, while local businesses are struggling, the sales tax issue is the least of their worries.
Malarkey lives in Fargo.