More shopping from the couch

The Wenatchee WorldDecember 27, 2013 

I am trying to imagine the Amazon.com air corps delivery drones circling my neighborhood, gently dropping off brown cardboard boxes in the snow, in plenty of time for Christmas. Judging from the delivery van traffic in my neighborhood the last month, I think mid-air drone collisions would be a concern, but they’ll probably work that out.

We seem to be approaching the dream age when we do much of our shopping on the little computers we carry in our pockets. Whether this is a good thing or the end of the world as we know it, I do not know. I don’t think it matters. We consumers will do what is convenient if the price is right, and ignore the social and economic consequences.

We may see our local retailers suffer, and that will be poignant. They are our friends and neighbors. But after we express sympathy and regret we will reach for the iPad and check out the buy-it-now deals on Ebay or sign up for Amazon Prime. I hope the delivery drone misses my tree.

This online buying trend is serious change. Retail sales for the Christmas season were up 2.3 percent compared with the year previous, according to Mastercard data relayed by Bloomberg and the Wall Street Journal. Some call that disappointing, some called it dismal. Online sales, however, were up by double digits. In-store traffic, the people beating their feet to the bricks and mortar, suffered.

Bloomberg reports that in-store traffic has been sliding since June. It plunged by nearly 12 percent in December over the year previous. Online sales for the season were called tepid, failing to meet predictions of 15 percent growth or more. Still, Internet sales on Cyber Monday, Dec. 2 this year, were up by a fabulous 21 percent. There were 10 days this month when Internet retail sales topped $1 billion.

"U.S. consumers offered plenty of hints in recent weeks that they were keen to shop from their couches," said Bloomberg.

Of course, all of us who purchased items online will run down to the Department of Revenue and pay the sales tax we owe. Better hurry to beat the rush.

Yes, technically speaking you owe sales tax in Washington on online purchases, even if the seller did not collect it. Estimates are Washington lost $540 million in sales taxes owed on online sales in 2012. Collectively, states were shorted by about $23 billion. Out-of-state retailers without a physical presence in a state are not required to collect sales tax, even if the purchaser owes it.

That’s an old story. The United States Senate tried to rectify it by passing the Marketplace Fairness Act by a handy margin last spring. The bill would require online retailers with more than $1 million in sales to remit sales taxes to states where they have customers, if the states streamline their tax systems and provide software for the calculations.

This measure is necessary, because the governing Supreme Court precedent says states cannot collect taxes from out-of-state online retailers lacking an in-state "nexus."

This sensible and fair legislation would help our traditional bricks-and-mortar retailers by erasing the online tax advantage, but the House of Representatives is where good sense goes to die. The Marketplace Fairness Act is stalled in the House, where key committee chairmen dislike it and many members have vowed never to vote for a tax, ever, even one already owed but uncollectable.

There may be room to move. The Supreme Court provided some motivation recently by rejecting an appeal by Amazon and Overstock of a New York state bill to collect online sales tax. That seems to give states the option of passing their own online sales tax bills one by one, which may force Congress to step in just to avoid interstate commerce chaos. In November Republican state legislators were "bombarding Capitol Hill" with pleas to pass the online tax measure, said The Washington Post.

They want a level playing field, they say. Maybe the drones can land there.

Tracy Warner is a Wenatchee World columnist. Email him at warner@wenatcheeworld.com.

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