This story originally appeared in the November 2015 edition of Georgia's Cities.
Katelyn Greenwood attended the Hometown Connection to discuss how online merchants who don’t collect sales taxes puts local store operators at a disadvantage.
One of GMA’s top federal priorities is the issue of e-Fairness. Each year, Georgia’s state and local governments lose more than $800 million in sales tax revenue. Without Congressional action, state and local governments cannot compel Internet and catalog retailers to collect and remit sales taxes that are due on purchases.
Just as importantly, the lack of e-Fairness can have a devastating impact on small brick and mortar businesses in Georgia’s cities. These businesses, the backbone of our cities, are often the victim of “showrooming,” a practice where customers shop at a local store but buy online to avoid paying sales taxes. This practice results in a 6-7 percent competitive price disadvantage to the online retailers who don’t collect sales taxes. GMA believes it is time for Congress to level the playing field for these businesses by approving e-fairness legislation, such as HR2775, the Remote Transactions Parity Act.
At a recent Hometown Connection hosted by Auburn city officials, Georgia Congressman Jody Hice heard first-hand how this issue impacts local retailers. During the meeting, Katelyn Greenwood, owner and founder of Auburn’s Rawhide Boot Company, described customers coming into her store, trying on merchandise, getting personalized customer assistance, and then leaving the shop to purchase the same merchandise online with free shipping and no sales tax.
“These companies operate without a storefront and ship direct from the warehouse to the customer,” Greenwood said. “They don’t collect sales taxes from the customer and they don’t charge shipping. I don’t know how they get away with that but it’s not fair to local store operators.”
Also attending the Hometown Connection was Georgia House Appropriations Chairman Terry England, who for many years owned a farm and garden supply store in Barrow County. Rep. England recalled how some customers would come into his store to look at merchandise, then buy it online on their phones as they walked out of the store to avoid paying sales tax.
“The Georgia legislature has done what it can to require businesses with a physical presence in Georgia to collect the taxes,” England said. “Congress must take action to fully level the playing field.”
“Local business owners keep our downtowns vibrant, volunteer on our local boards like the Downtown Development Authority and contribute every day to making our community better,” said Auburn Mayor Linda Blechinger. “It’s an issue of