Toys "R" Us Closing Stores Amidst Competition from Amazon

From coast to coast, momentum continues to build for the required collection of sales taxes by online retailers, as the unfair advantage such firms hold over brick-and-mortar outlets becomes more and more clear.  In Boise this week, a sales tax bill that already passed the state House 46-21 was cleared by a Senate panel to move to that body's floor for a vote.  The bill would require e-tailers that transact at least $10,000 in Idaho sales to collect sales taxes.  An interesting caveat in the bill limits enforcement to firms that have an affiliation with an existing Idaho business, however.  Thus, this is not a blanket rule.  The bill's sponsor has stated that leveling the playing field for Idaho businesses is the main goal of the proposed law.

Visit a Store but Buy Online

Adding insult to injury, many shoppers are now not only buying online, but visiting physical store locations first to try on an item, or examine it.  Or so Curtis Picard of the Retail Association of Maine would have people believe.  He alleges that in his state, the 5.5% sales tax savings is enough to spur this phenomenon.  With mammoth online retailer Amazon carrying many of the same items that stores at shopping centers and malls do, it is easy to see how the savings would add up, on bigger ticket items at least.  One wonders though, if the savings would be enough on smaller items to make a customer who took the trouble to travel to a store, really walk out without buying.  Avoiding a 5.5% tax on a $50 item saves just $2.75.  Still, to the extent it occurs, the practice hurts an already weakened sector, and Maine's retail association has used it as motivation to write a 'friend of the court' brief in favor of online sales tax, as part of a lawsuit that will soon be adjudicated in the highest court in the land.

Toys "R" Us to Close All Outlets in the US

The shocking news this week was that Toys "R" Us is planning to shutter not just some of its stores, but every outlet the company has in the United States.  Financial news reports focused on multiple culprits, but high on the list again (as in many tales of retailer woe) was online competition from Amazon.  Achieving sales tax parity may prevent other famous names from joining Toys "R" Us in the near future, or at least help to stem the tide.