Internet Retailers Have Unfair Advantage Over Main Street Retailers, Say Most Taxpayers in National Opinion Poll

Washington, D.C. -- If public opinion polls are any guide, most American taxpayers believe that it is unfair that Main Street retailers must collect sales taxes, while Internet retailers don't, says a national opinion poll released today by The U.S. Conference of Mayors and the National Association of Counties (NACo).

On the issue of tax fairness, nearly three out of four Americans (72 percent) say that it is unfair that their local businesses must collect sales taxes while Internet retailers do not.

Conducted in November, the random survey of 1,000 Americans clearly reveals taxpayers' strong opinions about sales taxes and the collection of these taxes on goods sold by vendors on the Internet. For most state and local governments, nearly a third of all revenues come from sales taxes.

"Whether shopping on-line or shopping at Sears, Americans realize that many of their community's established retailers are unfairly disadvantaged because they are collecting sales taxes while their dazzling cyber competitors are not," said Denver Mayor Wellington Webb, USCM President. "By collecting sales taxes, one provides for the future strength and stability of the local community, while the other neglects their responsibility to that same community."

Eighty percent of American taxpayers believe that all retailers who do business in their communities should collect sales taxes, and nearly 60 percent specifically said they support sales taxes on goods purchased from Internet retailers.

"The result of the survey don't surprise me at all," said Washington, DC Mayor Anthony Williams, who chairs the U. S. Conference of Mayors Task Force on E-Commerce and Internet Technology. "It's obvious to the average taxpayer that our cities have got to collect sales taxes if we're going to provide basic city services. Our cities and states rely on sales taxes to put cops on the streets, keep our streets clean, and to educate our children. "If local governments don't have the funds to provide basic services to our residents, everyone loses."

Current projections over the next five years indicate a loss of up to 10 percent of sales tax revenue because of a substantial increase in Internet sales on which sales tax will not be collected. Of those surveyed, over 80 percent said they would not support a local tax increase, such as property, personal property or income taxes to make up the difference, or welcome a reduction of public services to offset the loss of tax revenue.

One of the primary issues expected before Congress next year includes the tax fairness and equity issue as it relates to Main Street merchants, as well as to Internet vendors. With that in mind, nearly two out of three Americans (64 percent) believe Congress should take the initiative to simplify the collection of all sales taxes, whether an item is purchased over the counter, or on the Internet.

• Download a complete copy of the survey.
• Read the fact sheet entitled "Collecting Sales Tax Over the Internet: Myth vs. Fact".