A new report says Georgia is losing big money because it is not collecting sales taxes from many online retailers, despite a new law that took effect this year mandating those companies pay up.
The report by the Faith, Justice and Truth Project, an economic justice and education group, said Tuesday that the state is losing nearly $750 million a year in sales taxes not collected from big retailers who sell products or services online that are produced or provided by others — known as online “marketplace facilitators” of sales.
The state's estimate on a similar measure is closer to $160 million a year — according to an accounting for Georgia House Bill 276, which would have closed a loophole in collecting such taxes. While the Faith, Justice and Truth Project report focuses on some big retailers, HB 276 targeted, among others, ride-hailing companies such as Uber and Lyft and others, including Airbnb.
The measure — which would have forced companies like those to collect sales taxes on rides or stays — passed the House overwhelmingly but stalled in the Senate.
Whatever the size of the loss, the Rev. Bill Honor, the executive director of the project, told reporters at a news conference that the state is losing out on money that could be used to provide government services in Georgia.
“Capturing this lost revenue is a moral issue because it makes the business playing field much fairer for all Georgia citizens and does the right thing by putting those lost funds … to work for our communities.”
Larry Ramsey, counsel for the Association County Commissioners of Georgia, said sales taxes are the second-largest source of revenue for counties, after property taxes.
In the case of internet sales taxes, he said: “We are not talking about new taxes. We are talking about revenue that is already owed.”
The General Assembly passed a law in 2018 making online retailers collect sales taxes on the goods they sell. Some companies, such as Amazon, have been doing it for years, but many were not.
The vote came a few months before the U.S. Supreme Court backed internet sales taxes, knocking down a 1990s decision that limited states in collecting such duties.
President Donald Trump praised the ruling, as did brick-and-mortar store owners who felt they were at a disadvantage against online retailers who could sell products without the tax. They said that allowed internet retailers to undercut them on pricing products.
The law, which took effect Jan. 1, is expected to mean an extra $500 million to $600 million a year in sales-tax collections for state and local governments, according to state estimates.
HB 276, sponsored by House Ways & Means Chairman Brett Harrell, R-Snellville, was designed to also collect taxes from so-called "facilitators" whose websites or apps are used to sell goods or services provided by someone else.
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