Goshen News, Goshen, IN

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December 2, 2012

Local merchants feel they are hurt by state's online sales tax policy

GOSHEN — Maple City Hobbies had few customers on Black Friday.

What’s more — they had even fewer customers on Small Business Saturday, the shopping holiday supposedly dedicated to helping small business.

Manager Gary Pletcher said his two biggest competitors are sales tax and shipping from online competitors.

“The same model I sell for $24 in store, they’ll sell online for $16 without tax,” Pletcher said Friday. “Though sometimes they don’t tell you about the shipping costs, which makes them cost about the same.”

A group of Indiana small business owners held a press conference Monday to highlight the need to charge sales tax to Internet retailers who sell to customers in the state. Pletcher said he agrees.

“It would help my business probably,” Pletcher said. “It would be something less we have to compete with — it would help level the playing field.”

Goshen Chamber of Commerce President David Daugherty said Internet sales should have been taxed long ago.

“In a perfect world, you should pay taxes on Internet purchases at the time of sale,” Daugherty said Friday. “It’s only fair to people who buy or lease a building and put up displays and pay costs of advertising.”

Scott Woldruff, owner of Woldruff’s Footwear and Apparel, said he doesn’t understand how Internet businesses get around the state sales tax.

“We weren’t allowed to open our first day without a sales tax permit, and they’re retail, too,” Woldruff said Friday.

Woldruff said he didn’t know if charging sales tax to Internet retailers would help his business — and that his biggest competitors are too numerous to name.

“I know it would be an additional source of revenue (for the state),” he said.

While Indiana consumers are supposed to report online purchases on their state tax returns each year, Daugherty said he believes few people do so.

“It should be the responsibility of the seller, not the buyer, to collect taxes and distribute them properly,” Daugherty said. “It’s not difficult to ask someone to do, and it’s to be fair to local businesses — whether that’s Woldruff’s or Wal-Mart — that have a store. I think it makes sense, and the arguments against it are weak.”

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