Should online shopping be taxed?

BILOXI, MS (WLOX) - Buy some flowers from Lady Di's in Ocean Springs and you'll pay seven percent in sales taxes. Order the same flowers online and you won't.

For store owner Carl Banks, that is something that needs to be changed.

"Well, I think this is a law that needs to be passed. It's something that got going with the internet coming online and everything," Banks said.  "It's just something that should have been a part of the law ever since there's been online shopping really."

It's the same at Chandeleur Outfitters. Many of the items in the store can be found online at less cost because no tax is charged.  Carla Recio is the owner.

"I don't believe it's fair. I feel we need to be equal. I think they have an advantage over the small businesses," Recio said.

Retailers big and small across the country support the Marketplace Equity Act and one of the reasons why is the internet practice of "showrooming." In other words, customers walk into a brick and mortar store, pick up a jacket, try it on, see it looks good, see how it feels, put in back on the rack and then order it online, saving seven percent, which is Mississippi's sales tax rate.

"It's very frustrating," Recio said. "We try to have a positive interaction with them as they actually are saying we're just going to go home and order this online. We try and give them other reasons to stay in our store and what we can offer them to not and go do that."

The National Retail Federation, which backs the bill, estimates state and cities are losing out on a potential $23 billion. David Nichols is the chief administrative officer for the city of Biloxi.

"I don't have any idea how much, but you know it's got to be a lot of money to the local economy," Nichols said. "The cities can really use the money and it would be a real advantage to the state."

But online shoppers like Brooke Riggins don't want change.

"I don't think it's a very good idea because I'm online shopping for a reason. And I think I shouldn't have to pay sales tax when I go online," Riggins said.

Tax or no tax, this debate is just warming up. The bill passed in the Senate by a margin of 63 to 30. Passage in the republican controlled House is expected to be much tougher, with many House members saying the bill is nothing more than a huge tax increase on already financially strapped consumers.

In fact, South Mississippi Congressman Steven Palazzo issued a statement Monday saying he will not support the bill if it gets to the House.

"Over the past four years Mississippi families have faced high unemployment, flat wages, and increasing costs of goods and services. I could not support any bill that would propose new tax increases, and I will be closely reviewing any legislation that passes the Senate," Rep. Palazzo said to WLOX News.

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