Top lawmakers are making another run at forcing online retailers to begin collecting taxes on what they sell in hopes of leveling the economic playing field with Georgia stores.
House Ways & Means Chairman Jay Powell, R-Camilla, filed House Bill 61, which would force online retailers with at least $250,000 or 200 sales a year in Georgia to either collect and remit to the state sales taxes on purchases or send “tax due” notices each year to customers. Copies of the notices would go to the state Department of Revenue so it would know who owes the money.
Powell’s committee decides whether tax legislation moves in the House, and his co-signers on the bill guarantee it will get attention at the Capitol: House Appropriations Chairman Terry England, R-Auburn; House Rules Chairman John Meadows, R-Calhoun; House Minority Leader Stacey Abrams, D-Atlanta; and House Ways & Means Vice Chairman Trey Kelley, R-Cedartown.
Powell’s measure is the latest shot fired in a years-long battle to get online retailers to collect sales taxes on purchases. The owners of retail stores — who have a lot of political clout at the Capitol — have long said they are handicapped by the fact that they have to charge state and local sales taxes on what their customers buy while many online retailers don’t. That means products can cost less when bought online.
The U.S. Supreme Court in 1992 essentially said sales taxes should only be collected when a seller has a physical presence in the state in which the sale occurs, such as a store or a warehouse.
Congress has been reluctant to pass e-tax legislation, and while several states have approved or debated such bills, they all but invite a court fight and a hard-press lobbying effort by big online retailers.
The General Assembly passed a bill in 2012 aimed at getting Amazon.com to start collecting sales taxes, and in 2013 the company decided to do so. Three years later it announced plans for a distribution center in Jackson County, which means it might have fallen under the Supreme Court ruling anyway.
Powell said many other e-retailers still don’t collect or remit the taxes to the state.
“Part of what we are trying to do is collect the sales and use taxes (state and local governments) are entitled to but find hard to collect,” Powell told his committee this week. “Part of this is a fairness issue.”
He added that state sales tax collections have been relatively flat since the end of the Great Recession in part because online, tax-free sales have continued to increase.
A report suggests collecting those taxes could mean an extra $274 million in revenue for the state and $200 million for local governments. Not surprisingly, a lobbyist for Georgia’s cities told the committee his organization supported Powell’s efforts.
The committee chairman said he expects the issue will wind up in court if HB 61 passes. But his committee sounded ready to get that legal debate started.
“We’re not here to give one business an advantage over another,” said state Rep. David Knight, R-Griffin. “The government shouldn’t say one business should be paying taxes and one shouldn’t. We shouldn’t be choosing winners or losers on taxes.”
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