The Dangers of Online Sales Tax & Future Reliance
Online sales tax is a hot topic item right now. Especially with the current city council. While there may eventually be an appropriate time for this discussion, taking the position to blaze the trail to collect online sales tax is shortsighted, detrimental to jobs, and would not produce any additional revenue.
Due to current nexus laws online retailers are required to collect sales tax in states they have a presence. Presence is defined by an office, employee, or any goods located in that state. The largest retailers such as Amazon, Wal-Mart, Target, ect. already have a presence in Kansas and therefore collect sales tax from online sales.
This fact puts the entire burden of the law on the smaller retailers who work to compete with the likes of Amazon just to stay in business. With Amazon boasting a profit margin of less than 2% my opponent would be asking for our local online business owners to absorb an instant additional 9.1% in their pricing. It doesn't take much math to come to the conclusion that this would leave our local business owners with only two choices. They would be forced to close their business or simply move it 5 miles to the east where a Missouri city could benefit from their local job and economic contributions. We can not afford more of the same anti-business red tape by these core members of city council that also sent Google Fiber running for the border
This subject was approached as usual in a recent Committee of the Whole Meeting as leaders are counting on Kansas to pass the legislation and bring a budget saving windfall to our city. Bill Ebel, the City Manager of Overland Park advised the committee that projections show that collecting online sales tax would only result in an additional two million in revenue. Keep in mind, that assumes the extremely unlikely scenario that these businesses can actual absorb the cost, stay in Kansas, or even comply. One could make a valid argument that once the legislation is passed and the business does what is best for them the revenue actual generated wouldn't even be enough to cover the cost of government compliance checks.
This is simply shortsighted, bad business, and dangerous to our local economy.