May 20, 2013
KNOXVILLE, Tenn. (WVLT) -- Tennessee's small business owners say the state's sales tax policy isn't fair. They have to pay it but internet and out of state companies don't. They want state legislators to close the online tax loophole.
"The internet has obviously taken business away from local merchants," said Paper Paraphenalia owner Kay Leibowitz.
Rick Terry, another small business owner has seen it firsthand. Internet sales aren't always taxed in Tennessee, so people come into his Lenoir City jewelry shop, pick out and size engagement rings, then buy them online.
"They have a huge advantage right now with that 9.25% sales tax, and we just want a level playing field. That's all we want. Because we can compete," Terry continued.
The ticket price on one of his diamond rings is $9,025. With a 9% sales tax in Loudon County, Terry's customers end up spending an additional $700 in taxes.
Terry added, "If we have to compete dollar for dollar with an internet company, that's going to really hit the profit margin."
So why don't they launch websites of their own?
Leibowitz doesn't like the idea.
"It's very expensive to start a proper internet site. And I have so many items, that it's cost prohibitive to make that type of investment for the amount of return I might get," she said.
Besides cost, a lot of business owners don't want to sell their products with the click of a mouse.
Terry said, "I like the brick and mortor sales. I like the relationship with my customers, it's just more fun for me. I like people."
And local businesses offer one thing you can't always find online; the human touch.
Governor Haslam weighed in on the subject. He said internet sales are too big a piece of the economy to ignore. The Governor and Senator Lamar Alexander are urging congress to support the Market Place Fairness Act.
