Tax-free online shopping causing problems for local businesses

By Courtney Lane - bio | email
Posted by Ellen Krafve - bio | email

TYLER, TX (KLTV) - Many have been shopping from the convenience of home...or sneaking it in at work this "Cyber Monday." Web sites are still offering savings and even free shipping to lure in shoppers. Nationally, retailers saw a slight increase in sales this Thanksgiving weekend, and lots of sites are offering even deeper discounts online.

"I think you can get better prices online and organize your shopping better and not get carried away by mobs in Wal-Mart," said Sara Kelley, an online shopper.

About 97-million Americans are expected to shop online the Monday after Thanksgiving - a huge increase from Cyber Monday, last year. And, with the growing popularity of online shopping, there has been a growing debate on whether internet sales should be taxed just like in-store purchases.

The tax-free online competition is tough for local businesses which also have the burden of paying high overhead costs.

"I do think it's a little unfair that most internet sites do not have to pay tax," said Donnie Thedford, with Don's TV and Appliance. "Now, most of the large, national chain stores, if they have one of those stores in your state, you do have to pay the state sales tax on that."

Thedford says he is an online shopper himself. But, he warns big online purchases also come with a big risk.

"There's really no one to police who sells that product and so there's a lot of what we'd call black market products as far as not authorized dealers," said Thedford.

Tom Mullins with the Tyler Economic Development Council, agrees you have to buy from secure sites only. And he says the tax issue has been a long term problem.

"It's going to be very controversial because people want the internet to be open and...with the least amount of control possible," said Mullins. "But if there are abuses whether it's tax issues or content issues, you're probably going to see some regulations happen in the future."

"We've looked at doing both ways at having a pricing systems like the internet with nothing included, but the bottom line is we feel our customers are still looking for an added value," said Thedford. "They want someone to install it, to explain it to them, to service them after the sale."

But, as more people have high-speed internet and access on their phones, brick and mortar stores are facing an uphill battle for your dollars, and our local economy could suffer if the internet wins.

"On a national level, the fact that people are shopping...through the internet is a positive," said Mullins. "But, it doesn't help in terms of providing tax revenues to operate state and local governments."

Thedford hopes that face-to-face customer service and security will keep folks coming back.

"We want you to purchase for life most of those internet companies out there are interested in one click," said Thedford.

With that said, most Cyber Monday deals continue through Monday night so there's still time to surf for savings.

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