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Internet tax would battle 'showrooming'

Posted: March 27, 2012 - 11:02pm

Have you ever wondered why we have laws?

Laws don’t exist just to punish dishonest people. They also exist to keep honest people honest.

That isn’t to say people would be dishonest, or dishonorable, without laws forcing them to do otherwise, except for one thing: They would be.

Want proof? Let’s have a show of hands: How many of you have purchased something from a Web site, and at the end of the year have on your own written a check to the state to pay the sales taxes on that item?

I see Al Gray’s lonely hand up. Don’t feel bad; I didn’t raise mine, either.

Few people know you’re actually required to pay sales taxes on such purchases, though ignorance of the law is no excuse. But payment is voluntary, with no random audits to catch scofflaws.

Understandably, that system doesn’t bring in much money. Just imagine what Walmart would look like if paying at the register was on the honor system, and no one tried to stop shoplifters. Even people who like to think of themselves as honest might not resist the lure of a new flat-screen TV, or at least a jar of pickles.

We know that people will not pay a tax unless forced to do so. We also know that an increasing number of people shop in stores only to get a look at an item before they go home, fire up their iPad or smartphone and order it from Amazon, tax-free.

There’s even a name for that: “Showrooming.” It drives brick-and-mortar retailers crazy. They pay taxes and licenses and salaries to keep open the doors of those “showrooms,” while being undercut by Internet retailers who don’t have to withhold sales taxes from people who won’t voluntarily pay them.

That’s the aim of part of Gov. Nathan Deal’s tax reforms, approved last week by lawmakers. Among them is a requirement that retailers charge applicable sales taxes on purchases made in Georgia, and remit that money to the state.

Deal expects the money to help make up for a cut in car taxes, among other things. Whether it actually pans out that way is anyone’s guess.

Deal and approving lawmakers will catch grief over this portion of the bill from people who are anti-tax under any circumstances. It’s a pretty safe bet, though, that most people won’t even know about it.

That is, they won’t know until they visit a brick-and-mortar “showroom,” look over an item and head home to order it online – and only then find out the state is going to require them to be honest.

Ryan Clark

I’ve long advocated naming Evans Towne Center Park for Ryan Clark, the Lakeside High graduate who was the first person killed in the Virginia Tech massacre while trying to help the student who would become the second victim.

One of our online commenters, Riverman, made a better suggestion: Name the new combined school system/county park behind Lakeside after Clark.

I’ve started the ball rolling with the blessing of Clark’s mother. If you like the idea, please contact your school board member or county commissioner to express support. Thanks.

(Barry L. Paschal is publisher of The Columbia County News-Times. Email barry.paschal@newstimes online.com, or call 706-863-6165, extension 106. Follow at twitter.com/

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Comments (15)


New law does not Mean amazon will collect use tax

The new tax reforms recently passed in Georgia do not mean that people who engage in "showrooming" will suddenly see a sales tax line item on their Amazon purchases. What will happen instead is that Amazon will cancel their affiliate program in Georgia, which will eliminate the nexus in the state. Amazon has already done this same thing in every state where an affiliate nexus tax provision was passed.

Amazon will not be the only company to do this - other large companies with affiliate programs will also follow. You may also want to watch for companies who move out of state because their business is dependent on affiliate revenues, which they will no longer be able to collect if they are doing business in Georgia.

I would anticipate Georgia seeing the same or less use tax collected following the tax provision going into effect. Illinois use tax revenues decreased after they put their nexus tax into effect. Illinois also had a couple of businesses move to Wisconsin as a result. And it's hard to know how many people were generating additional revenues from affiliate programs that are no longer contributing to their annual income tax.

Little Lamb


Excellent comment, Mr. Ludington. I was also wondering about how the small, mom-and-pop businesses who sell by mail order would become informed about the new Georgia law. Let's say you hand-build bluebird houses in Maine and market through the internet. Your total sales nationwide are about $40,000, and Georgia accounts for, say, $3,000. How does the Georgia Department of Revenue even know you exist? Are they going to send written notice by registered, return receipt mail to every retailer in the United States to notify them of the arcane rules about how to remit state and local sales tax to the State of Georgia. It sounds like more bureaucracy and more cost than it will bring in.

Many Arrows

No Use

Shoot, for over a year, the use tax return was MISSING. Even the rare filer could not access it. I had to tell an Assistant Revenue Commissioner about it to get it reinstated.

Rick Johnson

The way you started the

The way you started the article is absolutely great because the existence of laws actually helps honest people to continue being honest. For example, if some of them are involved in SUV car accidents, they will definitely need an injury lawyer to protect them in court: http://www.rickplezia.com/SUV_Rollover.php . There is nothing more important than feeling protected by the legal system.

Rick Johnson

Fairness and fair play are

Fairness and fair play are extremely important in business, even though most of the time isn't that profitable. If you check it out here http://technicomintnl.com/ you can find a relevant example in matters of testing electromagnetic compatibility. Thank you for the article, the way you write down your ideas is extremely realistic.

Mary Sanders

A business created on the

A business created on the internet seems like the best solution, giving the fact that it doesn't require a special workspace. But when it comes to paying these taxes, they should turn to a company that offers best tax preparation software in order to make sure their business doesn't lead to legal consequences. Anyway, thanks for the article, this is pretty helpful for everyone out there who wants to go online and offer their services.


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