State needs to collect online taxes
Published 12:02 am Tuesday, January 31, 2017
The playing field for Mississippi-based retailers will get a bit more level this week as Mississippi begins taxing the country’s online sales leader.
Mississippi has been negotiating with online retailer Amazon and succeeded in getting the company to begin paying a 7-percent use tax that effectively matches the sales tax that Mississippi-based businesses collect and remit.
Although the head of the Mississippi Department of Revenue would not provide exact details of Amazon’s Mississippi sales data, Commissioner Herb Frierson suggested the taxes received should be between $15 million and $30 million per year.
If that range is accurate, Amazon is selling somewhere between $215 million and $430 million in merchandise to Mississippi residents.
Imagine how much the total online sales — including non-Amazon merchants — must be.
Anyone crying foul about the “new” tax is ill informed. The tax has been due for years. The onus to pay, however, was on the consumer, not the merchant since Amazon had no physical facility within the state’s borders.
Unfortunately few — if any — residents ever reported their online sales to the state.
To that end, the new change is shoring up a much-needed weakness in the state’s tax system.
We encourage the state to continue to press to collect tax on all online transactions and work to pinpoint the location at which the online sales are made — perhaps done through the ZIP code of the shipping address or the billing address of the transaction.
Having that information would allow the state to more fairly distribute back a portion of those locally generated taxes to the communities from which they are derived.
Until that change is made, we would hope the state would earmark the additional tax revenue to fund infrastructure needs or economic development endeavors. Both are badly needed and would be wise investments for the newfound tax revenue.