Maine news, sports, weather | Kennebec Journal, Augusta, Maine

June 20, 2012

GEORGE SMITH: Internet sales tax a terrible idea for Maine taxpayers, businesses

George Smith

If Gov. Paul LePage and U.S. Rep. Chellie Pingree, D-1st District, agree on something, one of them must be wrong. In this case, both are wrong.

LePage and Pingree want to force us to pay sales taxes on items we purchase on the Internet. The federal Marketplace Fairness Act, which the two endorsed a couple of weeks ago, would require online merchants to collect sales taxes for each state.

The governor and congresswoman think this would somehow boost instate retailers, by leveling the taxing field. Good for them to be thinking about Maine businesses. Shame on them for forgetting Maine taxpayers.

Apparently neither gave any thought to the possibility of eliminating the sales tax instate. That would level the playing field, too, and it sure has worked well for New Hampshire.

Mainers buy so many things in New Hampshire that I'm surprised the LePage-Pingree plan doesn't also force New Hampshire businesses to collect Maine's sales tax.

I can't believe that our tax-cutting governor isn't concerned that this federal act will force Mainers to pay more in taxes. The KJ/Sentinel editorial of June 5 expressed my reaction exactly: Gasp!

And before you tax-lovers jump all over me, let me acknowledge that Maine law already requires us to pay Maine's sales tax on items purchased out of state, including online. Ah, perhaps you didn't notice that line on your Maine income tax form that asks you to disclose those purchases and submit the sales tax on them along with your income tax payment.

As this newspaper's editorial gently pointed out, "Maine customers are supposed to report their online purchases and pay Maine sales tax, but unfortunately many do not."

The only unfortunate thing is that we are required to pay that tax.

I avoid national retail chain stores as much as possible, preferring our small businesses that offer exceptional service and keep my money in Maine. Maine's small businesses most assuredly will not be helped if more of our income is sent to the government. That will leave us with less money to spend in Maine stores.

Indeed, many of Maine's successful small businesses now sell their products online, all over the world. Forcing them to collect sales taxes for every state in our nation will be a costly administrative nightmare for them.

Can you imagine the time and expense of calculating sales taxes for each state (including figuring out which items each state taxes), recording and collecting the taxes, and distributing the taxes to each of the 50 states? The expense alone of purchasing the computer software for this will be staggering. Imagine the reporting requirements, the audits and the complexity of this nationwide taxing system, hoisted on the backs of Maine's small businesses.

Pingree says this bill would provide a boost for Main Street. I say, it's more like a kick in the pants.

I'm thinking today of small-business owners like Monica in Lubec. Monica's Chocolates started in a little house near the Campobello bridge, then moved to its current location on Route 189. Monica's story could be a movie. She moved here with her husband from Peru, where she was a fashion designer. When Monica's husband became ill, she turned to a special recipe from home to make and sell chocolates.

These are no ordinary chocolates. They are made with incredibly rich chocolate and combined with interesting ingredients. Monica makes truffles filled with a nutty Peruvian filling, and blueberry and raspberry truffles that have a hint of Maine wine added.

(Continued on page 2)

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