Farm Bureau: E-Retailers Dodge Taxes, Rural Communities Languish

Newsroom / November 3, 2017

The American Farm Bureau Federation and South Dakota Farm Bureau Federation last night asked the Supreme Court to take up a case that could do away with internet retailers’ ongoing refusal to collect sales taxes – a policy that only adds to the economic pain felt in so much of rural America today. They made their arguments in a friend-of-the-court brief filed in South Dakota v. Wayfair, Inc., Overstock.com, Inc., and Newegg, Inc.

 “When a family-owned grocery, drugstore, or gift shop is forced to shutter its doors after generations of serving a town’s citizens, it does not merely represent the loss of one business. It also often means another empty storefront in an already struggling downtown, the loss of jobs (including off-farm jobs of family farmers and their spouses), and less foot traffic for the neighboring shops,” the Farm Bureau wrote. “It also inevitably means less revenue for critical public services, such as emergency responders, law enforcement, and educators.”

Noting that the Supreme Court’s decision in this case won’t solve all of rural Main Street’s problems, the brief explains “it would at least foster a more level playing field between large internet retailers and local stores, thereby protecting not only sales tax revenue but jobs and a sense of community.”

Real-world effects of the internet sales tax loophole can be severe. “The departure of a local general store can leave a rural town with no grocery or pharmacy within a 50-mile radius. This is not uncommon. Rural grocery stores are slowly disappearing across the nation—with a particularly pronounced decline in Midwestern and Great Plains states…. As internet retailers expand into the grocery and fresh market business, rural communities can expect further closures of rural grocery and general stores.”

A copy of the full brief is attached.

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