For fairness, R.I. needs level field

The General Assembly considered but did not pass Bill 7375, The Remote Sales Tax Collection Act, for real and fair competition reflecting 21st century commerce. It was “held for further study.”

Today, online-only retailers are not required to charge and collect sales tax, while local businesses must. However, the sales tax (in all but five states) is still owed. The collection of these taxes is difficult to enforce unless online sellers have either a physical store or a warehouse in the state. When sales tax is not collected at the time of purchase, the burden falls on the consumer to report and pay. Compliance is virtually nonexistent. According to recent studies, states are estimated to lose $23 billion a year from uncollected sales taxes on online goods.

The tax disparity puts local businesses at a significant economic disadvantage and stifles the overall economy. According to a July 2013 study conducted by Arthur B. Laffer and Donna Arduin, federal legislation that would let states close the online sales tax loopholes would result in a more efficient tax system, a larger tax base and lower tax rates for all taxpayers. This would increase states’ GDP by more than $563 billion and add more than 1.5 million jobs in the next 10 years.

How does this tax disparity impact our community? Providence Place is one of the top shopping and tourist attractions in Rhode Island, contributing more than $23 million annually in sales and payroll taxes, while employing 2,250 part- and full-time employees.

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Passage of this bill would let Providence Place and other bricks-and-mortar retailers compete fairly with online retailers.

We hope that the R.I. House of Representatives gets serious and passes this bill in the next legislative session. Whether you shop at a store or online, taxation should be fair. •

Mark Dunbar is senior general manager of Providence Place mall and Paul DeRoche is director of the Rhode Island Retail Federation.

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