According to the Department of Commerce, total e-commerce sales in the U.S. surpassed $395 billion in 2016 and is up 15.1 percent from 2015.
For this reason, Kansas lawmakers are correct in pursuing ways to collect sales tax from online retailers who do not have a brick-and-mortar store in the state.
Peter Hancock, the statehouse and politics reporter for the Lawrence Journal-World, reported on Monday that the Senate tax committee drafted a bill that would “require online retailers and others who currently don’t collect or remit Kansas sales taxes to start reporting those untaxed sales to the Kansas Department of Revenue.”
“It would also require those businesses to notify their customers on each transaction that the sales tax is due,” Hancock reported. “That presumably would give the state more ability to collect taxes directly from consumers who, under Kansas law, are still obligated to pay those sales taxes, even though few of them actually do.”
The bill is similar to a current law in Colorado, which the 10th Circuit Court of Appeals ruled did not improperly interfere with interstate commerce. Interestingly enough, Judge Neil Gorsuch, President Donald Trump’s nominee for the Supreme Court, was one of the three judges who heard the case.
The House, however, is considering a bill modeled after a current law in South Dakota that declares “any retailer with more than $100,000 worth of annual sales in the state meets the physical-presence requirement, regardless of whether that company has a facility in the state.”
Supporters of the House’s approach believe the bill, if passed, will be challenged in court, but prevail.
As consumers’ shopping habits continue to drift toward online retailers, states that do not already have laws to collect sales taxes from such retailers, who typically do not have a physical store in the state, need to adopt one soon.
For Kansas, there should not be any controversy about passing such a law. Not only would such a law raise much-needed funds for the state, it would simultaneously protect local businesses that do pay local and state taxes and are vital to the communities they reside in.
I expect the House and Senate will come to a compromise on this issue — how long that takes is completely up in the air — but it will be interesting to see if Gov. Sam Brownback supports such measures.
Caleb Snider is a sophomore in public relations. The views and opinions expressed in this column are those of the author and do not necessarily reflect the official policy or position of the Collegian. Please send comments to [email protected]