First Wal-Mart, now Amazon: Utah small businesses get crushed

<p dir=”ltr”><span>Utah small businesses now have to compete not just with each other, not just with national corporations, but with massive online retailers like Amazon. And because of the sales tax exemption enjoyed by these virtual stores, many small businesses in Utah say they can’t compete.</span></p><p dir=”ltr”><span>Many online stores without physical storefronts don’t have to pay any sales tax. Plus, mega-sized online merchants already have the ability to offer lower prices than most local, mom-and-pop shops.</span></p><p dir=”ltr”><span>Ethan Allen owns a small business in Salt Lake City called Allen’s Camera, and he says he’s struggling to compete against those online merchants. Now, more small business owners are supporting a new bill from Utah Republican Representative Jason Chaffetz, who thinks</span> <a href=””><span>all Internet-based transactions should include a sales tax.</span></a></p><p dir=”ltr”><a href=””><span>The Chaffetz bill</span></a> <span>would collect sales tax based on the location of the consumer. Without a physical storefront, local and state governments can’t collect taxes on those digital transactions.</span></p><p dir=”ltr”><span>”It’s unfair right now,” says Allen. “I’m paying the tax and they’re not. It shouldn’t be that way.”</span></p><p dir=”ltr”><span>Allen says he often has to turn away customers who ask him to absorb the sales tax himself.</span></p><p dir=”ltr”><span>”Most of the things in electronics that I sell have a [profit] margin of 8 – 10%,” he says. “So there is no chance that I could ‘eat’ the sales tax.”</span></p><p dir=”ltr”><span>This decade, commerce has increasingly become e-commerce, and</span> <a href=””><span>58% of consumers research products online</span></a><span>, according to Pew Internet. And if they find a cheaper price through an online merchant, then local stores lose out on their business. In fact, Chaffetz says many stores see customers come in to ask about products, even though they fully plan to purchase them online.</span></p><p dir=”ltr”><span>”What I believe in as a pretty hard-core conservative is there are certain principles that we think are important. One is parity,” Chaffetz says. “If you’re buying the exact same thing in the exact same spot, you should pay the tax.”</span></p><p dir=”ltr”><span>Critics of the bill says Chaffetz’s plan will put unnecessary burdens on virtual retailers.</span></p>

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