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Group urges collection of online sales tax

By Matt Pommer

A broad-based coalition is asking state government to provide tax fairness by requiring all online-only internet retailers collect and remit the sales tax on purchases by Wisconsin residents.

So far, the idea has met resistance from many Republicans who fear it would hurt their political claims of not increasing taxes this year. The coalition had called for action to support Main Street Wisconsin, an economic revitalization program for traditional business districts in the state.

Under current law, sales tax is due on any online purchases — online purchases are not tax free,” the coalition said in a letter to legislators. State law requires the consumer to pay the sales tax to the Department of Revenue. A line on the state income tax forms provides an avenue for such payments.

In 2009, more than 30,000 Wisconsin residents paid $2.1 million in such sales taxes, a small portion of the taxes due. Citing national data, the coalition suggests what is owed this year to Wisconsin could be $289 million. That would be more than 9 percent of the projected deficit in the state’s general-revenue fund at the start of the year.

“Wisconsin-based businesses collect the Wisconsin sales tax on online purchases,” the coalition said. “However, out-of-state-only retailers like Amazon refused to collect the state sales tax.” That gives them a “tremendous price advantage over Wisconsin-based employers by forcing the tax accounting, payment, and liability on individual consumers.”

The coalition said: “We believe this practice is wrong, places Wisconsin job creators at a competitive disadvantage and places an undue burden on Wisconsin consumers.”

The issue is national. More than 28 states have passed legislation which will “provide fairness for their Main Street businesses,” the coalition said. Three states, including Illinois, recently passed laws to require sales tax collection by out-of-state retailers with only online sales.

Wisconsin politicians were delighted when one Illinois company moved to escape the Illinois provision. That’s a key reason the tax idea is getting a cold shoulder here. But the coalition borrowed Gov. Scott Walker’s theme of “Wisconsin is Open for Business” in its letter asking for tax fairness.

“As Wisconsin employers, we stand on the front line in creating and maintaining jobs in Wisconsin. In addition to providing well paying jobs and generating millions into the state’s economy, we also give back to our local communities and various charitable organizations in Wisconsin,” the coalition said.

“We know that a fair tax climate, equitable applied, is essential to a strong business climate conducive to attracting and creating jobs in Wisconsin,” it said.

Groups in the coalition are the Association of Wisconsin Retailers, Association of Wisconsin Tourism Attractions, Coalition of Wisconsin Aging Groups, League of Municipalities, Metropolitan Milwaukee Association of Commerce, Midwest Hardware Association, Wisconsin Automotive and Truck Dealers, Wisconsin Counties Association, Wisconsin Independent Businesses, Wisconsin Retail Council and the Wisconsin Towns Association.

Matt Pommer worked as a reporter in Madison for 35 years. He comments on state political and policy issues.

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