EagleTribune.com, North Andover, MA

Business

April 7, 2013

Federal lawmakers push for online sales tax

(Continued)

“More and more, people are going into stores, looking at products and then buying them with their iPhone, buying it on their BlackBerry, because it’s cheaper,” Behlke said.

That stark storyline played out for a Chicago suburban sportswear business that had survived 18 years but shut its doors last year.

Soccer Plus owner Bob Naughtrip said he and his sales staff saw “showrooming” at the headquarters in Palatine, Ill., and another store in Libertyville, Ill. High-end soccer shoes and other items would be reviewed closely, tried on and then purchased later with a computer.

But beyond the individual sales, the big losses came when huge youth soccer clubs would buy over the Internet. With as many as 1,000 players, a club or league could shift buying patterns that add up quickly when uniforms and gear run from $100 to $300 per player, Naughtrip said.

If buyers can avoid paying the 9 percent total state and local sales tax in Palatine on a $300,000 purchase, for example, the savings is $27,000.

Though the Great Recession and higher property taxes also played roles in the demise of the Soccer Plus business that Naughtrip once thought was “recession-proof,” the sales tax issue was a significant factor, he said.

“We’re the poster child of what happens when people buy outside of the area to save sales tax dollars,” Naughtrip said. “They don’t understand the impact on a business like ours.”

Durbin took the Soccer World story to the Senate floor, where he told colleagues how Naughtrip lost his small business and its local jobs.

“If they’re going to have a fighting chance to compete, they ought to be on a level playing field,” Durbin said.

Durbin’s fellow Illinois Democrat, Gov. Pat Quinn, certainly agrees. Quinn, who says Illinois is losing about $200 million a year in state sales taxes through Internet purchases, sent a letter to U.S. House and Senate leaders recently urging action on the issue.

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