The President of the Nebraska Retail Federation wants government to level the field between brick and mortar and online retailers by requiring the online companies to collect sales tax. Jim Otto says a great deal of revenue is being lost that could help revenue-short state and local governments. Otto estimates Nebraska could be losing up to $100 (m) million a year….
“In 2014 alone….Amazon only….Amazon…don’t include all of the other online-only sellers…they sold over a quarter of a billion, that’s billion with a B, sales to Nebraskans and they avoided collecting over $18 million in Nebraska sales tax. Now if Amazon alone is $18 million, I think the number is easily $100 million or more that Nebraska is losing.”
An online retailer is only required to collect sales tax in Nebraska if the business has a storefront location in the state. Otto says in that case, it’s known as “nexus” or a connection within the state. So the aforementioned Amazon is not required to collect sales tax from its Nebraska customers.
Otto says he’s not against buying products online…
Otto says legislation requiring collection of sales tax by online retailers passed the U-S Senate a few years ago, but did not pass the House. Otto says in the midst of all the frustration, South Dakota has passed legislation requiring online merchants to collect sales tax and he hopes the Nebraska Legislature follows suit.
Otto says downtown businesses are the lifeblood of a community and they’re hurt by online merchants…
Some feel the tax is not owed to the state. Quite the contrary says Otto. He says the tax is supposed to be collected from the buyer through self-reporting of the purchase on the buyer’s income tax return. He doubts many Nebraskans report their online purchases, so it’s a tax that goes uncollected.