Online Sales Tax Overdue in W.Va.
Seldom can it be considered correcting an injustice when government starts collecting a new tax. It can this time around.
Every dollar in growth of sales by online retailers locataed outside West Virginia has been a reminder to in-state small business owners of the basic unfairness, not to mention economic foolhardiness, of state tax policy for several years.
Retailers with physical stores inside the state have always been required to add state sales tax to what they charge customers. Proceeds are sent to Charleston.
That puts many Mountain State businesses at a 6 percent — the sales tax rate — price disadvantage against out-of-state online sellers.
It amounts to picking winners and losers. Online retailers win by not having to collect the sales tax. West Virginia businesses lose by having to do so. So do their employees and communities.
Last week, state officials announced that henceforth, West Virginia will direct online retailers, presumably throughout the country, to begin collecting the sales tax from customers in our state. There will be an exemption for small enterprises.
Credit Gov. Jim Justice with changing his mind on the matter. In June, when the U.S. Supreme Court issued a ruling clearing the way for many states to tax online sales, the governor said he did not want to burden consumers with a new tax. Good for him for understanding that not charging the tax is a burden on our state’s small businesses.
It has been estimated the state may collect $50 million a year from the tax. Let us hope that, instead of merely dumping the money into the bottomless pit that is the state bureaucracy, officials put it to good use.
Perhaps using the proceeds to provide a small measure of tax relief to West Virginia small businesses and consumers would be a good bet.