If federal officials can’t figure out a way to snag billions in tax revenue slipping away because of dated online-sales tax policies, state and local officials need to step in and do the job.
If you’re a frequent online shopper, you probably already know that many online sales are exempt from sales taxes. If you buy something online in Aurora from a retailer with a real “bricks and mortar” store in Colorado, you still have to pay the tax, but there are myriad e-retailers that let you bypass that nuisance.
Now unless you live in a cave in central Colorado, you also know that the state is desperate for money for roads, schools, health care, mass transit, social services and the list goes on and on. Locally, Aurora has shut down libraries and now faces a new dilemma. Long-awaited light rail service is finally headed to Aurora, but the city doesn’t have enough money to build adequate parking.
It’s mind-boggling that as places like Colorado Springs shuts off the lights to save money, billions of dollars in potential revenue slips away because of a good online incentive policy gone bad.
About 20 years ago when online shopping was in its infancy, total sales were measured in hundreds of thousands of dollars. Last week, so-called Cyber Monday sales went off the charts, 30 percent more than swollen online sales last year. According to IBM Benchmark, which tracks Internet sales, retailers are expecting a whopping $586 billion in online sales by the end of this holiday season.
Just how much money the government loses because of spotty and shifting no-tax policy is unclear. Estimates vary from $11 billion nationwide to upwards of $100 billion. When you look at how much cash would make it to the empty general funds of Aurora and Colorado, you’re talking serious impact.
Here’s the bottom line:
Despite the ravings of a small group of tax protesters, a strong, healthy state and local government is a good thing. They provide much-wanted and needed roads, schools, public safety and other services that almost all Colorado residents agree are critical. Likewise, most Colorado residents are sensible enough to know that government services aren’t free. For better or for worse, sales taxes make up a biggest part of how we all have agreed to fund our state and local governments. There are good arguments against using sales taxes as a public funding source, the best one being that it’s too volatile. Aurora’s financially struggling government is a perfect example of that problem.
But given that we all agree we want a strong and solvent government, and that we will depend, for now, on sales taxes to help fund that government, it’s only fair and responsible for the state to ensure it’s getting the money it has coming to it.
When the Internet was just getting warmed up and so-called “e-commerce” was in its infancy, it made perfect sense to overlook sales taxes as a way to lure consumers onto their computers and away from the “brick-and-mortar” shops.
With annual Internet sales exploding, those days are long gone. Now, it’s wrong to give retailers like Amazon an unfair advantage over struggling businesses here in Aurora by allowing them a continued bye on collecting sales taxes.
It’s time to move beyond a costly and useless incentive. Before this congressional session ends, Congress needs to pass the bipartisan Marketplace Fairness Act, and state lawmakers need to iron out problems that keep Colorado from getting the money it needs and has coming.
While nobody wants to pay taxes, we wouldn’t have a state in our country if we didn’t, at least not one anyone would want to live in. The expectation of paying sales taxes is there, it’s time to create a fairer retail market here and across the country, and it’s time for governments to get access to revenue needed to make all of our lives better.

