A taxing situation
As Pennsylvania's personal income tax forms tell the tale, very few people in the commonwealth actually shop online.
The state Revenue Department believes that more than $350 million in unpaid sales taxes on online purchases by Pennsylvanians go unreported and uncollected every year.
In 2012 Pennsylvanians were required for the first time to report their online purchases for the previous year and pay the 6 percent sales tax. But only 1.6 percent of returns included any acknowledgment of online purchases, generating about $3.3 million in tax payments.
That demonstrates that sales taxes must be collected at the point of sale, regardless of whether than point is in a physical store or online.
Due to a 1992 Supreme Court ruling involving mail order sales, retailers are required to collect the sales tax only if they also have a physical presence in the state where the sale is made.
That, of course, is ridiculous. It denies to state governments legitimate revenue from taxes already on the books, forcing them to come up with other taxes to cover the revenue. And it creates a competitive disadvantage for retailers who operate physical stores, hire local people and pay local and state taxes.
The U.S. Senate last week passed a bill requiring all online retailers to collect appropriate sales taxes, a process for which technology readily is available.
Opponents in the House contend the Marketplace Fairness Act is a new tax, even though it simply authorizes states to require retailers to collect existing taxes. It's not a tax on the businesses or on access to the Internet.
This is a matter of tax fairness. Reps. Thomas Marino, Lou Barletta and Matt Cartwright should vote for the bill.