In today’s political climate it is increasingly difficult to find middle ground between Democrats and Republicans, but a new coalition is looking to change that.
The Faith, Justice and Truth Project (FJTP), a recently formed organization that looks to “promote economic justice and popular education among Georgia’s communities and people of faith,” held a press conference at the State Capitol Tuesday to introduce its report on a tax loophole that costs Georgia hundreds of millions of dollars annually.
Titled Georgia Sales Tax Erosion: Big Retailers Are Not Paying Their Fair Share, the 60-page report breaks down the loss of revenue from e-commerce companies failing to collect sales tax from third party vendors. It estimates that Georgia is missing out on nearly $750 million worth of sales tax revenue annually, money that activists and legislators on both sides of the aisle agree that local governments desperately need.
Since 2006 internet sales as a percentage of total sales have more than tripled, and as technology advances and that process becomes easier and easier, legislation has fallen behind. The report states that 90% of Walmart’s e-commerce sales are made by third party vendors – and thus not producing sales tax due to the state.
Rev. Billy Honor, executive director of FJTP, told IAG Tuesday that the issue was not just about tax revenue, but morals. Honor said many disadvantaged Georgians are victims of the “digital divide” and are unable to take advantage of online purchases that do not include sales taxes. With many municipalities lacking in funds, notably in African American and rural communities, recovering millions in missing sales tax revenue would help level the playing field.
Funding shortfalls also hurt Georgia taxpayers, as local governments are often forced to increase property taxes to make up for millions lost in e-commerce sales tax. Larry Ramsey, counsel for the Association County Commissioners of Georgia called tax collection a “zero sum game – revenue has to come from somewhere.” He continued,“we are not talking about new taxes. We are talking about revenue that is already owed.”
2018’s HB 61 was the first Georgia bill to address the issue, requiring online retailers to pay sales tax on items sold within the state. While the legislation proved mostly successful, many companies, including Walmart’s online service, operate as ‘marketplace facilitators’ for third party vendors and thus do not collect sales taxes.
Earlier this year Rep. Brett Harrell (R-Snellville) introduced HB 276, which worked to close the loopholes laid out in the FJTP report. The bill enjoyed bipartisan support in the House before stalling out in the Senate, but supporters say it will be back.
Georgia Budget and Policy Institute analyst Danny Kanso called the idea “common sense bipartisan policy” and that it will be revisited in 2020. “It’s one more common sense measure to make sure we apply the sales tax across the spectrum of retail” he said Tuesday.