You don’t have to tell Jack Seibert of Jack Seibert Goldsmith Jeweler in Columbus, Ohio about the need to level the playing field between brick-and-mortar and online merchants when it comes to online sales tax. He’s living it every day.
He tells a recent story of how his firm spent several days helping a local consumer who in the end decided not to purchase a diamond from his store because the price increased by $810.00 with tax on a $12,000 sale. A few weeks later that same customer brought a stone he bought online back to Seibert’s store to be set into a custom design for an engagement ring. While it’s great that he has that part of the business, it’s a constant reminder of a lost sale and lost revenue all because of the sales tax disparity.
“I am not able to be fairly judged and patronized by the jewelry consuming public because of this unfair tax burden which enables the consumer to avoid additional costs,” Seibert explains.
Every day small businesses like Seibert’s collect and remit sales tax as mandated by their state governments, while their online competitors get off scott-free. And it’s having a real impact. NRF President and CEO Matthew Shay was in Ohio earlier this summer talking to business owners like Seibert and outlined that a recent study by the Economics Center at the University of Cincinnati found that leveling the playing field for local retailers could add 15,000 jobs to the state’s economy—and that’s just in Ohio.
As Seibert notes, when it comes to competing with online merchants, local retailers like him, “are at a distinct disadvantage because state sales taxes are not being charged and collected and forwarded to the taxing authorities. The ramifications are huge.”
Next week in a hearing before the House Judiciary Committee, legislators will hear the case for passing federal legislation to level the playing field for all retailers. It seems like a proposal Congress shouldn’t pass up.