Riddle us this, Gov. Jim Justice: If the U.S. Supreme Court has just cleared the way for states to collect sales tax on products bought online, and West Virginia is looking under every couch cushion to come up with future funding for PEIA, why not go ahead and collect the revenue the state already has coming to it?
Actually, fairness should have been an even bigger motivation to collect that revenue. Online shopping is great. But online merchants across the country enjoy advantages that brick-and-mortar stores don’t, such as the ability to not remit local sales taxes.
Physical stores and other businesses also incur costs that online merchants don’t have. They maintain a building, hopefully with some curb appeal. They have to staff and secure it. It takes more time and employees to maintain a space where the public comes and goes all day, touching and trying the merchandise. Public restrooms, lighting, snow removal. Such factors contribute to cost.
The presence of brick-and-mortar businesses also contributes to the vitality of West Virginia towns and counties. They help create the sense of place, a place to go, to gather, to hold a parade. Ask any local merchant about the questions they get. Can we hang our community theater poster in your window? Would you like to sponsor our Little League? We’re collecting for band uniforms.
So why should they pay sales taxes, when another business selling the same thing to the same customer does not?
Online shopping isn’t going to go away. It’s convenient. It’s a happy development for consumers, but it does not deserve the subsidy it gets from the state of West Virginia, particularly at the expense of West Virginia’s own businesses.
It just so happens, the state has an extra incentive to make sure it is getting all the revenue it is owed.
To convince the state’s teachers to go back to work, Gov. Justice and the Legislature wisely froze Public Employees Insurance Agency payments early this year, so state employees could count on their bills not going up for once. The governor appointed a group to recommend a long-term solution.
To get through the current year, the Legislature pulled one-time money from other categories and got lucky — revenue went up this year. As they well know, that is not a long-term strategy. You have to be prepared for downturns, too. Of course, the PEIA bill grows by about $50 million a year, a much larger problem.
So, while funding PEIA is not the best reason for the state to collect sales tax revenue that it is already owed, it should be motivating.