New poll says Internet sales tax unpopular idea in Ohio
“Ohioans of all political stripes, majorities, count themselves in opposition to this,” said Andrew Moylan, executive director of the R Street Institute, a Washington D.C. think tank.
Under current law, states are only able to collect sales taxes from businesses that actually have a physical presence in the state. Business groups, like the Ohio Council of Retail Merchants, argue that gives online retailers an unfair advantage in the marketplace.
However, Moylan argues that forcing a business based in one state to collect sales tax for 46 states and more than 9,000 taxing authorities is unfair.
“Asking online businesses to be accountable for all of those when you are only asking brick-and-mortar businesses to be accountable for the one where they are physically located is the exact opposite of a level playing field,” he said.
A bill, labeled the Marketplace Fairness Act, would change current law and allow states to require online retailers, known as e-tailers, to collect and remit sales tax from customers. The U.S. Senate passed the bill, but the House hasn’t taken it up. A new version has since been introduced in the Senate.
Ohio has a use tax, which requires residents to voluntarily report items purchased out of state and pay a tax on it.
Moylan also worries that an internet sales tax could open up retailers to other cross-state taxes.
“From our perspective this is a really dangerous expansion of state tax authority,” he said.