You have reached your limit of free articles this month.

Enjoy unlimited access to SpringfieldNewsSun.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and interactive features. Starting at just 99c for 8 weeks.

X

Welcome to SpringfieldNewsSun.com

Your source for Clark and Champaign counties’ hometown news. All readers have free access to a limited number of stories every month.

If you are a News-Sun subscriber, please take a moment to login for unlimited access.

breaking news

West Liberty-Salem High School shooting victim is student, reports say

Ohio considering adding sales tax to online purchases


Ohioans who turn to the Internet to buy big-ticket items such as TVs and jewelry and avoid paying sales tax may soon find the total price in their online cart to be about the same as they would pay in a traditional store.

House Republicans balked at Gov. John Kasich’s plan to expand sales tax to more than 80 goods and services but added language to the state budget bill that moves Ohio closer to collecting sales tax from Internet and catalog purchases.

The first provision, buried deep in the 4,500-page bill, positions Ohio to collect sales tax from all Internet retailers once Congress passes legislation enabling states to do so. The U.S. Senate passed a non-binding resolution last month to support the Marketplace Fairness Act, which would empower states to collect sales tax from online purchases.

The second provision would immediately lead to more sales tax collection by changing the definition of “nexus,” the location determined taxable by state law. Currently, only retailers with a physical presence in Ohio are required to collect sales tax. State law requires individuals and businesses pay use tax at the same rates on items purchased out of state, but very few comply.

The proposed change would require retailers that use packers or shippers located in Ohio to assess and collect sales tax when an item is sold. For example, remote retailers might not keep goods in stock but transfer orders to a wholesaler that packs and ships the good. Retailers that use these “drop shippers” in Ohio would have to collect and remit sales tax to the state.

The House approved the whole budget bill late Thursday night in a 61-35 vote, with three Democrats joining Republicans to support the bill. The Senate will review the bill this week and likely make changes.

The Ohio Council of Retail Merchants, which pushed for the changes, says they would be a good first step toward leveling the playing field between brick and mortar stores and online retailers.

“This is the No. 1 issue for retail in the country and it doesn’t discriminate between large and small — it affects us equally,” Gough said.

Matt Mayer, president of free-market research group Opportunity Ohio, said both changes would mean a tax increase for most Ohioans. Mayer said brick-and-mortar stores reap benefits of sales tax in fire and police protection and other infrastructure improvements but retailers in other states do not.

Mayer said the tax change would disproportionally hurt small businesses that would have to purchase software or services to track and collect the thousands of tax rates around the country.

Ohioans have been subject to use tax on items purchased outside state lines and brought back since 1936, one year after the state began collecting sales tax.

A line was added to Ohio individual income tax returns to make it more convenient to pay the tax, but results have been dim. Self-reported use tax amounted to $2.8 million in 2011, according to the Ohio Department of Taxation.

“Certainly, there are some people who know and are just enjoying the opportunity to not pay tax, but I think more often the case is they’re just not aware they owe it,” said department spokesman Gary Gudmundson. “They just think there’s no tax on Internet sales.”

Skipping out on use tax payments could mean a 15 percent penalty plus interest — if the Taxation Department finds out. Gudmundson said use tax violations are rare, but are usually discovered when an out-of-state retailer is audited.

He said the department did not request the sales tax changes and has not studied the possible effects.

Gough didn’t know how much revenue the change could generate for Ohio, but a University of Tennessee study estimates Ohio lost $307.9 million in 2012 from unpaid tax on Internet sales.

Gough said states need to examine online sales tax if they plan to depend on those revenues to pay for state services.

“More people are going to continue to buy online — that won’t change — so traditional sales tax revenues will continue to decline,” Gough.


Reader Comments ...


Next Up in Ohio

BREAKING: Student injured in West Liberty High School shooting
BREAKING: Student injured in West Liberty High School shooting

The Champaign County Sheriff’s Office has confirmed a student was injured in the shooting.  The student’s condition is unknown at this time.  The law enforcement agency had declined to disclose the hospital where the student is being treated. Parents of West Liberty-Salem students are being asked to pick up their children at the...
Inauguration weather forecast: Dreary, rainy and cold
Inauguration weather forecast: Dreary, rainy and cold

>>Complete coverage of Donald Trump's inauguration  The National Park Service decided to make a change to its "no umbrella policy," WJLA reported. "Totes" style umbrellas that collapse will be allowed on the parade and the Mall, but "long, non-collapsible" umbrellas will be prohibited, the National Park...
Rescuers find 6 survivors in Italian hotel buried in snow
Rescuers find 6 survivors in Italian hotel buried in snow

Rescuers have found six people alive under snow at the site of the avalanche that buried a hotel in central Italy, CNN reported Friday. A spokesman for the local department told CNN the rescuers are in contact with the group but have yet to reach them. Up to 30 people are feared trapped in the Hotel Rigopiano, at the foot of the Gran Sasso mountain...
Report: ISIS destroys part of ancient Syrian amphitheater
Report: ISIS destroys part of ancient Syrian amphitheater

A Roman amphitheater in the ancient city of Palmyra has been partially destroyed by ISIS fighters, the Syrian state news agency reported Friday. According to CNN, Syrian news agency SANA reported that "ISIS destroyed the facade of the Roman theater and the Tetrapylon in the ancient city of Palmyra."  Syrian state news also reported that...
Joke is on Florida comedian after Cowboys tattoo backfires
Joke is on Florida comedian after Cowboys tattoo backfires

The playoff loss by his beloved Dallas Cowboys is going to stay with a South Florida resident for some time. Permanently, actually. Jason Garnett, a 24-year-old stand-up comedian from Boynton Beach, was so sure the Cowboys were going to win the Super Bowl this season that last month, he put it down in ink — on his right biceps. "Super Bowl...
More Stories