Internet sales impact California and Monterey County.
Wednesday, November 22, 2006
For shoppers, the day after Thanksgiving is the official kickoff to a four-week shopping blitz that officially ends the day after Christmas. For retailers, it’s long been known as Black Friday, the day that can single-handedly catapult stores out of the fiscal red zone and deep into the black.
In 2006, an estimated 35 percent of all holiday shoppers will do more than half of their holiday shopping online beginning Nov. 24, starving local retailers of much-needed business and depriving cities of millions of dollars in tax revenue.
California cities lose an estimated $1 billion a year in sales tax revenue, according to the state Board of Equalization. Carmel City Administrator Rich Guillen says Internet shopping takes its toll.
“Everything gets impacted,” he says. “Sales tax funds public safety, fire, street maintenance, and cultural centers. When sales tax declines, we’re forced to rely more heavily on hotel and property tax.”
Sales tax is only imposed on local Internet shoppers if the online store has a physical retail location; otherwise, consumers are responsible for paying their own use tax to the state. For example, Amazon.com shoppers are supposed to pay sales tax to the state—but nobody ever does. During the 2005 holiday shopping season, Amazon sold more than 108 million items. At its busiest, Amazon sold one item every 41 seconds.
Deborah Lee Hughes owns Girl-Lee Boutique in Oldtown Salinas.
“Cities lose big, and so do shoppers,” she says. “The Internet just can’t compare with the personal connection: people, the sounds, the holiday lights, the music.”
Ryan Williams, the marketing manager for Carmel Plaza, says the experience and local consequences are things consumers should consider. “Internet shopping is the most impersonal thing there is,” he says. “So your Amazon page says ‘Welcome’ and maybe gets your name right. Go into a store, and your experience begins the moment you step in.
“We spend a lot of time and money on holiday shopping. It’s nice when we spend the time to connect personally with where it’s going.”