Senate poised to pass online sales tax law

by: Essex Porter Updated:

SEATTLE - The U.S. Senate is poised to overturn a tax loophole popular with online shoppers, a loophole that's just as unpopular with local merchants.

Senate leaders have set May 6 as the day they'll vote to force online sellers to charge sales tax to all online buyers.

Local store owners say some of the customers engage in a practice they call "Showrooming" -- using their stores to look at merchandise, then buying it online.
Shelby Schenck says that adds up to big losses at his running-shoe store, Run 26, in Mill Creek -- "$4 (thousand) to $5,000 a month, it's a good chunk if you add it up over a year."

Congresswoman Suzan DelBene is fighting to get the legislation passed in the House. "This allows our Main Street retailers to, people who are into their communitiesto have an equal playing field ... if you want to buy online you still can; it just means there won't be a permanent built-in price difference."

The Department of Revenue says taxing online sales could bring an additional $284 million to Washington state next year.

Locally based Amazon is not objecting to the change because it already has to charge customers sales tax in many states. However, eBay is asking consumers to write their lawmakers in opposition. The company claims small online sellers will be overwhelmed with paperwork.

The legislation has a sales tax exemption for online businesses that sell less than a million dollars in merchandise a year.

Montlake Bicycle Shop owner Neil Wexler thinks all businesses should be on the same playing field when it comes to taxes"Let's just compete for the value that we offer and not for a subsidy or a penalty from the government."