Tax loophole stirs call for equity

By Rick Badie

Scott and Leslie Hellman appreciate savvy customers who try to learn as much as possible about items in their furniture store.

They understand why people want to touch and feel the strollers, car seats, bedding and other accessories they are looking to purchase for their newborn or toddler. And the Hellmans, owners of A Room of Their Own in Kennesaw, have no qualms about customers trying to land the best bargain, a good deal. And they welcome any and all to their store.

Sometimes, though, people have no intention of doing business with the Hellmans. They educate themselves, then move on.

“Let us think about it,” they’ll say on the way out the door. Then some of them go home, get online and find an Internet retailer that carries the same item they saw in the Hellmans’ 12,000-square-foot showroom.

And they’ll make the purchase electronically.

“This is a constant battle,” Scott Hellman told me. “We have customers who come back and tell us they got [the item] without paying shipping costs or a sales tax. With today’s great technology, they can walk in with their phones, take a picture, then go find it on Amazon.com. It’s killing us.”

The Hellmans, though, aren’t necessarily upset with the customers. Their beef is with online merchants who don’t have to collect sales taxes.

As we talked, Scott pulled out a calculator and did some figuring. Last year’s holiday sales were down roughly 10 percent, a majority of which stems from fewer stroller and car-seat sales.

“If you look at our strollers and such, I’d say the government lost out on $10,000 worth of tax revenue that they could have collected if a purchase had come through me instead of online. That’s a rough number, but it’s a number I feel confident presenting.”

The Hellmans, along with other small-business owners, don’t want an advantage. They simply seek an even playing field, one that’s fairer. One where e-commerce retailers that lack a physical presence in Georgia are required to charge sales taxes at the time of the purchase. Right now, they aren’t required to, though major merchants such as Wal-Mart collect the tax for remittance.

In situations in which Internet businesses don’t charge a sales tax, payment falls on us, the consumers. It’s called a use tax.

I’d wager most Georgians don’t even know the law exists. (I didn’t.)

Scott Hellman said the consumer shouldn’t shoulder the burden of having to pay the tax.

He’d prefer that the responsibility be placed in the hands of online retailers. Just as it is with brick-and-mortar establishments.

“If you send me a bill every month as a business, the state should be doing the same thing to these online retailers,” Scott Hellman told me.

“If not, the state of Georgia is saying that it favors online retailers. Other states are [correcting the tax loophole].”

Perhaps it’s time for Georgia to do likewise.