Digging Deeper: ‘Taxed Out’

Thanksgiving night is exactly two weeks away, and people will be ready to take advantage of holiday weekend sales. But, do you think about how you spend your money and the impact it has on your hometown?

The holiday shopping season is the biggest time of the year for retailers. And, how shoppers spend their money is a hot topic right now.   

"It’s nice to go in and look at the different things and try on the clothes," shopper Tami Clarke said. 

"I like to try things on," shopper Luan Aten said. "I like to feel the material. I’m a big clothes shopper."

According to the National Retail Federation, about 8.5 percent of all retail sales are now made online. 

"You don’t have to worry about it," Clarke said. "You push the button and it shows up at your house a few days later."

"A big box store or something that I"m familiar with, then it’s a lot easier to just press click and send," Aten said.

Numbers show while few are buying items like groceries and other "hard goods", the big winners in online sales are apparel, shoes and other soft goods.

Kristin Dreasler, with Ally’s Boutique in downtown Quincy, said while her store’s online presence is very important, she knows she can’t compete with the online market selection. She said her focus is on customer service.

"I think it’s very important for people to come in and see the quality of what they are buying," Dreasler said. "When you buy online you don’t get to touch your sweater. You read the fabric for the content, but a lot of people don’t know what that is and that’s OK. That’s why we are here to help you." 

As more people leave the brick and mortar stores for the convenience of online shopping, cities across the Tri-States are losing out on sales tax revenue. 

In recent years, Quincy has gone from two to three percent growth to small declines in sales tax. 

"People think when they pay their sales tax online that you are paying your city’s sales tax," Quincy Mayor Kyle Moore said. "But in reality, you’re paying your state or you may not pay any at all, but municipalities do not get any of that sales tax."

Currently, when you make a purchase, for instance at a Quincy store, a percentage of the sales tax you pay goes back to the city to fund things like police and fire, roads and other city services. 

To make up for the falling revenue, Moore said the city is forced to cut back. 

"You cut out the fat and now you’re getting into the muscle and the bone and that’s not good," Moore said. "We are really getting to a point now where we are saying ‘What’s the bare bones we can operate?’, and in reality do you want your city services to be operated in a bare bones capacity because that means we are not investing back into the community."

Moore said as the city council begins to fill the budget gap for next year, it must consider other revenue, such as adding a locally imposed online sales tax.

Congress is also currently considering locally imposed online sales tax as it looks to update the laws that went into effect back in the 90s.

The Supreme Court is now looking at whether states should be able to charge an online sales tax if the seller does not have a physical presence in the state where the shopper lives.



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