At least a couple of times a week, Maggie Jetter says her Nashville store is the testing ground for young mothers and fathers to check out baby merchandise later purchased online to avoid state and local sales taxes.
“A lot of people come in to see, feel and review what they ultimately buy from an Internet retailer,” said Jetter, who opened her Tweed Baby Outfitter’s store in April 2010. “It’s difficult to understand why we reward these faceless businesses on the Internet that often don’t contribute as much to our community.”
Jetter and other traditional brick-and-mortar retailers can even the playing field with Internet retailers like Amazon and Overstock.com this weekend during Tennessee’s three-day tax-free holiday on most school-related merchandise.
But many conventional retailers are anxious for a more permanent equity in how sales taxes are collected. Although consumers are supposed to pay state and local sales taxes on all purchases, only brick-and-mortar retailers or Internet companies with a physical retail presence in a state are required to collect sales taxes, according to the U.S. Supreme Court’s governing ruling.
Next year, states and localities are expected to lose as much as $24 billion in uncollected sales taxes on Internet and catalog sales.