On Feb. 21, Jim Rosenheim, owner and CEO of Tiny Jewel Box in Washington D.C., spoke on a conference call on behalf of the Marketplace Fairness Act, new congressional legislation that would give the states the authority to collect sales tax from Internet sites.
“Today we can compete with the items sold on the Internet,” said Rosenheim, one of several small business owners on the call organized by the Marketplace Fairness Coalition. “However, we can’t compete with the advantage afforded by the fact that we must collect sales tax while our competitors on the Internet are not required to do so.”
He pointed out the disadvantage that arises when customers browse brick-and-mortar stores but make purchases on the Internet. “Brick-and-mortar stores shouldn’t be operated as showrooms where consumers can find products, have their questions answered, and then go to the Internet to buy them at the same price but not pay sales tax,” said Rosenheim, who also serves on the board of Jewelers of America.
“We only ask for a level playing field,” he said. “We’re not asking for a new tax. We are just asking that sales tax collection be an obligation of all parties.”
When asked hypothetically if he would be willing to lower his prices to compete with an online competitor who may cut down prices to compensate with the tax, Rosenheim stated that his business has adjusted to Internet sales over time.
“I don’t know how online merchants are going to react to this change,” he said. “I don’t necessarily assume that they’re going to lower their price to make up the difference of the sales tax. But we’ll look at the situation as it arises and see how it affects our business and then make a judgment based on that.”