Minnesota Republicans float strange ideas about online sales tax collection
Drazkowski wants online sales tax revenue to go toward a tax holiday for guns.
Currently, very few Minnesotans pay sales taxes for online purchases. But Minnesotans do pay sales taxes for purchases they make at physical retail locations. Hence, physical retail locations face a more onerous tax burden than online retailers like Amazon.
State lawmakers on both sides of the aisle are now interested in leveling this disparity. For years, state legislators have hoped the U.S. Congress would approve legislation forcing online retailers to collect state sales taxes, but it still doesn't look like that will happen any time soon. A solution will have to come from the state level.
So Republicans now face a dilemma. On one hand, forcing companies like Amazon to collect state sales taxes helps local retailers like Target and Best Buy, which is good. But on the other hand, GOPers have an instinctual revulsion against any and all taxes hikes. So in recent days Republican lawmakers have started floating some strange ideas about how to deal with the online sales tax issue.
One of them is the brainchild of Rep. Steve Drazkowski, R-Mazeppa. Drazkowski apparently has no problem with forcing online retailers to collect state sales taxes, which could reap as much as $5 million for the state next year alone. What's strange is what Drazkowski proposes to do with the tax money.
"My preference is for an outdoors, guns and ammo holiday," Drazkowski said during a committee meeting on Tuesday. In other words, aside from retailers Target and Best Buy, the true beneficiaries of beefed-up online sales tax regulations would be Minnesota hunters.
Downey wants to exempt all retailers from collecting online sales taxes.
Another strange idea is the brainchild of Rep. Keith Downey, R-Edina. Rather than having more sales tax money flowing into the state's coffers, Downey, like many other Republicans, wants less. Toward that end, he proposes that all retailers be exempted from collecting sales tax for online sales, including companies like Target and Best Buy.
But this is a self-defeating proposal. Why would anyone in their right mind pay 7 percent sales tax to buy a TV at a Target big-box store when they can buy the same product from the same company online for less? The big losers in that scenario would be employees at Target's retail locations, who could lose their jobs as more sales tax-free business is done online.
Brian Steinhoff, president of the Minnesota Retailers Association, told the Stribe that Downey's proposal "seems to exacerbate the problem even more."
Apparently, this is what happens when Republicans find themselves in the unusual position of supporting a tax increase. Stay tuned to see what our GOPers think up next.
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