Poll: Idahoans don’t want taxes collected from online shopping

Brad Iverson-Long//July 23, 2014

Poll: Idahoans don’t want taxes collected from online shopping

Brad Iverson-Long//July 23, 2014

R Street Institute Andrew Moylan and State Rep. Gary Collins of Nampa discuss a new poll on online sales taxes. Photo by Brad Iverson-Long.
R Street Institute’s Andrew Moylan and State Rep. Gary Collins of Nampa discuss a new poll on online sales taxes. Photo by Brad Iverson-Long.

Most Idaho voters, whatever their political stripes, don’t want a sales tax on online purchases.

That’s the finding of a new poll commissioned by free market public policy organization the R Street Institute and the National Taxpayers Union, a nonpartisan advocacy group that promotes lowering taxes.

The groups polled Idaho voters on a federal effort to extend sales taxes to online retailers. While some Idaho retailers may benefit by selling online to customers outside the state without collecting sales taxes, others say that large retailers like Amazon.com will be the ones to gain if all online sellers need to collect taxes.

The poll found that 52 percent of Idahoans oppose federal legislation that would allow states to make online retailers collect sales taxes based on where their customers live. Thirty-two percent of likely voters favored the tax collection plan, with numbers changing only slightly based on age, political ideology or how frequently a person shops online. Only polled Democrats supported the measure, by a 45 percent to 37 percent margin.

Polls by R Street have found similar results in Virginia, South Carolina, North Carolina, Wisconsin, Minnesota and Pennsylvania. Andrew Moylan, executive director of R Street, said Idaho is one of the 20 states R Street has polled because it’s been a topic debated for years in the state.

“There have been a lot of fights on this at the state level at the Legislature. It’s been something that’s been a big discussion point on the state level but on the federal level as well,” Moylan said. A federal plan, the Marketplace Fairness Act, has been approved by the U.S. Senate without support from Idaho’s senators.

If the Marketplace Fairness Act were to pass Congress, Idaho wouldn’t be able to collect sales taxes from companies like Amazon or Overstock. States that want to collect sales tax for online purchases through the Marketplace Fairness Act must either adopt the Streamlined Sales and Use Tax Agreement, a tax simplification plan that more than 20 states have signed on to, or meet simplification mandates that include establishing a uniform sales tax base for the state. State legislators have rejected the Streamlined Sales and Use Tax Agreement, several times, most recently in March 2013.

State Rep. Gary Collins, R-Nampa, who leads the Idaho House Revenue and Taxation Committee, said the new poll results may not change what state lawmakers do. He said right now the state is waiting to see what happens federally.

Moylan said online tax collection efforts are difficult for retailers to comply with and could open them up to audits from faraway states’ tax departments.

“As it stands today, brick and mortar stores have actually a pretty easy way for collecting sales taxes for people that walk into their stores,” he said. Collecting taxes for online sales, though, adds complexity, he said. “You have to jump through the hoops of 46 different sales tax states, potentially, and 9,998 separate taxing jurisdictions across the country.”

Collecting taxes from Amazon and other online vendors would bring them into parity with brick-and-mortar stores that do collect Idaho’s 6 percent sales tax, according to Idaho Camera co-owner Pat Nagel.

“I do anything I can to make people buy from us, but that 6 percent advantage they have over me is almost insurmountable,” said Nagel. He said that 6 percent adds up on spendy items, like $1,000 digital cameras, which leads customers to “showrooming,” or trying out items in stores before buying them from a different online retailer.

“It happens a lot, and I really can’t blame people for that. It’s a loophole that’s been made that I can’t compete against,” Nagel said.

Wayne Johnson, owner of Angler’s Habitat in Caldwell, however, said extending sales tax collection to online sales would help Amazon and other large online companies, because they’d be able to absorb the large costs to comply with the laws.

“If this bill passes, it’s not going to save his business. Amazon still has a distinct advantage on you. If you sell online, we have the advantage over Amazon today, because they have to charge sales tax,” said Johnson. Johnson said his company has more than $2 million in sales, with most online sales  outside Idaho or the U.S.. That means he doesn’t have to collect any sales tax on those orders.

“With a nicely done website, you can compete, look like a multi-million dollar company and people will buy from you,” Johnson said.

Nagel said collecting taxes wouldn’t be any more difficult than it is for online companies to collect addresses and mail out orders.

“Technology today has made it very easy and simple to collect this tax,” Nagel said.

The statewide telephone poll was conducted by public strategy firm Mercury on June 3 and 4, with 30 percent of the 400 likely voters sampled responding via cell phone. In the poll, 36 percent of respondents said they are frequent online shoppers.