The Kentucky Retail Federation and several small-business owners in Kentucky are meeting in Frankfort this morning to throw their support behind efairness laws.
Currently, online-only retailers are not required to collect state sales taxes, putting brick-and-mortar stores at an unfair disadvantage, said Sarah Rowlette, director of communications for KRF, a member-based retail association that lobbies on behalf of Kentucky’s small businesses.
“It’s just a continual issue of leveling the playing field for our retailers,” Rowlette told Insider Louisville.
U.S. lawmakers have considered efairness bills before, but they’ve never passed both houses.
A national poll commissioned by the International Council of Shopping Centers found that seven out of 10 Americans support a federal law that would require online-only retailers to collect state sales tax when a customer purchases something. Eight out of 10 said it would simply be easier, according to the poll.
Customers who buy goods from online-only retailers are supposed to report their purchases and pay the sales tax with their annual tax return, but many don’t, Rowlette said, adding that it amounts to a loss of potential income for the state.
“No one’s really enforcing that,” she said.
Interestingly, major online retailer Amazon.com Inc. is required to pay Kentucky sales tax because it has substantial operations inside the state. However, people who sell goods on Ebay.com don’t have to pay sales tax unless they sell the item to someone in the same state.
While it might not seem like Kentucky’s 6 percent sales tax would make a difference, Rowlette said, it can on larger purchases, particularly with furniture, appliances and electronics.
“For those (small-business owners) it does affect,” she said. “It affects them in a big way.”