Question

Why does Maureen Riehl state that internet retailers have an "unfair price advantage" when they don't collect sales tax from out of state customers?

Answer 1

Answer:

See explanation below for answer.

Explanation:

Maureen Riehl states that internet retailers have an unfair price advantage when they don't have to collect sales tax because, by not collecting of tax, it can make their product be up to 10% lower than brick and mortar merchants, so in a market where the profit margins can be as small as 1% to 2%, the 10% profit margin can be a killer.

Therefore, Maureen Riehl suggests that retailers should be taxed just the same, regardless of whether they sell their commodities in a store, through mail, over the telephone, or on the internet. Maureen Riehl posits that the tax policy should not be allowed to determine the winners and losers in the retail industry.

At the end of the article, Maureen Riehl states that, using the same tax policy will put internet retailers and brick-and-mortar retailers on the same footing, where everyone can compete fairly and freely.