To keep providing critical services, cities and counties must recoup losses and collect new sales tax revenue from purchases made online. That was one of the key messages Avenu Senior Vice President Doug Jensen presented last month to the Municipal Fiscal Advisory Committee for the City of San Francisco, a community that’s home to many online and traditional brick and mortar retailers.
“Brick and mortar retail sales are rapidly eroding while online sales are growing,” says Jensen. “Municipalities cannot rely on the growth they expected because much of it is from online purchases distributed through pools or not collected at all. It is hurting the cities and counties that rely on this revenue to keep essential services up and running.”
“Cities and counties are still owed the sales and use taxes from online purchases,” continues Jensen. “Collecting that revenue has become a necessary burden that municipal leaders have to take on to get the revenue they need to ensure their communities are livable.”
Avenu joins many municipalities in supporting marketplace fairness legislation to hold online retailers accountable. Through bills like U.S. Senate Bill 976, online retailers in participating states would be required to collect and remit sales and use taxes. The company also awaits a critical U.S. Supreme Court decision this June that may lead to greater marketplace fairness and the requirement that all online retailers start collecting applicable sales taxes regardless of their physical presence.
“Our goal is to ensure all businesses have prosperous and thriving communities to do business in,” advocates Jensen.