COLUMBUS, Ohio, Oct. 18, 2011 /PRNewswire/ -- The State of Ohio could recapture 11,000 jobs if an internet sales tax loophole is closed, a University of Cincinnati study released today shows. The research also projects that state and local governments in Ohio are losing more than $200 million a year in sales tax revenues because of the state's inability to collect sales taxes on internet sales.
The study was conducted by UC's Economics Center on behalf of Focus on Ohio's Future – a non-profit research entity powered by the Ohio Council of Retail Merchants in partnership with the Alliance for Main Street Fairness.
In addition to the lost tax revenue – estimated to total more than $1.1 billion between 2007 and 2012 – Ohio brick-and-mortar retailers are projected to lose as much as $600 million in sales this year due to the lack of tax collections on internet retail transactions.
The UC study also estimates that achieving parity on tax collections between retail stores and internet-only retailers would allow the state to recapture 11,000 direct retail jobs – a figure that could rise to 15,000 when the indirect effects of spending and respending are taken into account.
"Ohio's Main Street retailers deserve tax parity with internet retailers," said Gordon Gough, Executive Vice President of the Ohio Council of Retail Merchants. "This study clearly illustrates the need to close the online sales tax loophole here in Ohio – the potential for job creation and revenue recapture is staggering."
"These are very, very significant findings," said Jeff Rexhausen, Associate Director of Research at the University of Cincinnati Economics Center. "Given the difficult economic circumstances affecting Ohio's retail businesses and its state and local governments, finding a way to bring fairness to the online sales tax process would be a huge economic boon to the state."
"Ohio's brick-and-mortar retailers have been at a competitive disadvantage for over a decade now," said John Marshall, standing in his showroom at Grismer Tire on Fourth and Main Street in Columbus today. "It's time to close the online sales tax loophole so that Ohio's small businesses no longer are at a competitive disadvantage to internet-only retailers."
The study cited an Ohio Department of Taxation report that showed that only 46,000 state income tax returns – less than 1 percent of all returns – included usage tax on internet sales. At the same time, surveys show that more than 60 percent of Ohio households made at least one online purchase in 2010.
Bipartisan legislation introduced in the U.S. House of Representatives last week seeks to make changes to federal law that would give states the ability to collect sales and use taxes on online purchases.
Jack Seibert, owner of Jack Seibert Goldsmith & Jeweler in Columbus, thinks it's long overdue, "It's about time our elected officials help level the playing field for Main Street businesses across Ohio. Small businesses are the drivers of economic growth in this country and I am happy to see Congress proposing a solution."
About the Ohio Council of Retail Merchants and the Alliance for Main Street Fairness
The Ohio Council of Retail Merchants is a leading Ohio trade association representing various companies along the business supply chain. The Council maintains a robust membership that includes 3,600 companies, ranging from Fortune 100 corporations, to influential regional businesses, and local enterprises that operate on Main Streets across Ohio. The Alliance is a coalition of Main Street retailers committed to educating the public and elected officials about leveling the playing field for brick-and-mortar retailers by closing the online sales tax loophole.
SOURCE Alliance for Main Street Fairness