Many of the nation's large brick-and-mortar retailers are also crying foul. They insist that the tax-free Internet puts both them and smaller Main Street retailers at a competitive disadvantage.
"We don't support new taxes, but we support tax equity and equitable collection across distribution channels between brick-and-mortars and click-and-mortars," says Steve Pfister, senior vice president of government relations at the National Retail Federation. To lobby Congress, national retailers, shopping center owners and associations established the e-Fairness Coalition last November. In order to sell tax-free, several companies, such as Wal-Mart and Borders, have launched their own stand-alone dotcom operations.
In its 1999 National Main Street Trends Survey, the National Trust for Historic Preservation found that Internet usage was a key factor in small-business growth because it allowed for better service to local customers and augmented traditional store sales.
After all, convenience still seems to be the primary reason people shop online. "All the stores come to us," says Richard Hirsch, CEO of Richard-Marshall Fine Flooring Inc., a Los Angeles manufacturer of high-end hardwood flooring. "There's such a difference between buying online and buying in a store that not paying sales tax is just an added benefit." Last year, Hirsch's company spent about $500,000 buying computers, software and other items over the Net.
But according to Thierer, "The threat of the Internet killing the Main Street economy is greatly overblown."