Payless ShoeSource is filing bankruptcy and closing 400 stores across the country. A month ago, JCPenney announced it was closing 138 stores, including the one in Columbus. A week after JCPenney announced those closings, Sears officials said they have doubts about the company’s ability to survive, having already announced the closing of 150 Sears and Kmart stores in January.
Amazon, which began as an online bookstore, has a market value of $370 billion, which is $160 billion more than retail giant Walmart.
What does all this mean?
More and more, Americans are doing their shopping online, which has ominous implications, not only for retail giants, but for small, local retailers. You don’t have to be a business owner to feel the effects of this trend, particularly here in Mississippi.
Mississippi’s budget relies heavily on sales tax receipts, regularly among the 10 states whose budgets depend most on those revenues.
Those decreasing revenues have led Gov. Phil Bryant to cut state services five times in the past 18 months, cuts that total more than $230 million.
With state unemployment at its lowest level in 15 years, it stands to reason there should be more disposable income. But if we are spending more, why aren’t we seeing that reflected in sales-tax collections which have consistently fallen below projections for the past year-and-a-half?
The answer is pretty simple: We’re still buying. We’re just buying online and in Mississippi no sales taxes are collected on online purchases from companies based outside the state.
The solution is obvious to everyone except to the one person who could do something about it.
During the recently-ended legislative session, the House passed a bill that would have required online businesses to collect the 7-percent sales tax every retailer in the state is required to collect. But the bill died in the Senate on the command of Lt. Gov. Tate Reeves. If the bill had made it into law, it would have generated anywhere form $50 million to $150 million additional revenue for the state each year, according to projections. That revenue would have gone a long way in helping to pull our state out of the red.
It would also have helped level the playing field for our locally-owned businesses, who already face a formidable threat from online retailers, who will continue to have an unfair advantage in the market place.
Our local retailers are the lifeblood of our communities, generating taxes, providing jobs and investing in our communities. They are our friends and neighbors. That alone should be enough earn our support.
That we risk even further cuts to essential services as a result of Reeves’ intransigence should also inspire us to demand action.
As it stand now, thanks to the Lieutenant Governor and his bull-headed supporters, every dollar that is spent online cuts 7 cents from our state and local budgets. Being penny-wise and pound foolish is bad enough. Our state is proven it’s not even penny-wise.
For the “no new taxes” crowd, let’s also make something clear; Requiring sales tax on online purchases is not a new tax. Retailers don’t pay taxes: They collect taxes. The bill would have simply required consumers to pay the taxes they already owe. There is nothing unfair about that.
The Legislature is expected to be called into special session sometime between now and the start of the fiscal year in July to address road/bridges funding and approve a budget for the attorney general’s office.
We urge legislators at that time to reconsider the online sale tax.
Every retailer in the state should call the Governor’s office to demand that action.
Who knows, he might even listen.
He should. Every Mississippian has a stake in this matter.
The Dispatch Editorial Board is made up of publisher Peter Imes, columnist Slim Smith, managing editor Zack Plair and senior newsroom staff.
You can help your community
Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 32 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.