Worry about local business
Well, good for West Virginia Gov. Jim Justice. Little more than a week ago, he reacted to a U.S. Supreme Court ruling by proclaiming in a news release that, “I don’t want to reach into West Virginians’ pockets when we don’t need to.”
High court justices have issued a decision hoped for by officials in many states. It permits states to pass laws requiring out-of-state retailers to collect sales taxes.
We’re looking at a potential bonanza for state government. During the first quarter of this year, Americans spent $123.7 billion buying things with their computers and smartphones, according to the Census Bureau.
Even assuming that half of online sales now aren’t taxed, the potential is enormous. At 6 percent, West Virginia’s sales tax rate, we’re looking at around $14 billion a year in new revenue for states.
But not West Virginia, says the governor. “When I took office and our state was struggling financially, at that desperate time, I might have considered supporting legislation to enforce West Virginia sales tax on out-of-state transactions,” his news release explained. “However, no I do not support adding additional taxes on our people in this manner.”
Yes, sales taxes are a burden. We could all do without them, couldn’t we? I doubt I need remind you, however, that we already pay a pretty penny in sales taxes — more than $1.2 billion a year.
That money comes from retailers whose stores we visit in person to buy everything from groceries to cars.
And there’s the catch. Store owners who, through their families, may have been doing business here for generations have to collect and rebate sales taxes to the state. That puts them at a competitive disadvantage against online retailers.
Assume for a moment that the Legislature and Justice could enact an online sales tax, then use the added revenue to reduce the rate collected by those with physical presences in West Virginia. It would never happen, of course; government always finds a way to take more.
But if such a scheme could be enacted, it would help Mountain State businesses compete against online retailers in California, New York, etc.
Why not consider that?
Here’s the thing: Justice seems ready to give the online folks a break. In exchange for what? What have they ever done for us?
Try calling an online company and asking for a donation to support your community’s youth baseball league. Be prepared for the person you’ve called to ask, “Are you kidding me?”
Never mind that the local grocery store made a nice donation to help the kids play baseball.
Or, tell an Amazon executive there how much of the company’s profit comes from your county, and ask how much in taxes the firm pays to support local schools. The reaction is likely to be, “Why would we do that?”
Meanwhile, the local hardware store owner is writing out a big check to pay his property taxes. Guess where much of that money goes.
Oh, and by the way: When your neighbor asks whether you know where he can get a job, do you suggest an online retailer?
Justice is to be commended for worrying about taxes West Virginians pay. He should worry about local business owners, too.
Myer can be reached at: email@example.com.