Skip to content

My 2 cents on SIU Edwardsville, e-commerce sales taxes and more

Ortbals Headshot 1 1 16By ALAN J. ORTBALS
    While never at a loss for an opinion, some months there are multiple issues vying for my attention. This is one of those months. So, rather than devote my limited space here to one subject, I’ll take some quick hits at multiple topics.
    Since its founding in the 1950s, Southern Illinois University Edwardsville has been the little brother of the Carbondale campus. Locked together all these years, SIUC received the lion’s share of the state funding, about $2 for every one SIUE received. That made sense when Carbondale had twice the enrollment of Edwardsville, but no longer. SIUC has been shrinking for many years to the point where the two are just about even and, in fact, SIUE is expected to surpass its older brother this fall. It’s time for the two to go their separate ways.
    If this were a for-profit business there would be no question as to where to invest the limited capital. Given the funding it deserves and the freedom to expand to meet the demand, SIUE could soar. There’s a bill in the legislature right now, sponsored by Rep. Jay Hoffman and Rep. Katie Stewart that would effectuate the divorce. It’s the smart thing to do.
    Some applauded recently when Illinois House Republicans acted to block a progressive income tax issue from going on the November ballot, calling it, “a victory on behalf of taxpayers.” Regardless of whether you favor a progressive structure or the current flat tax, I don’t see how depriving people of the right to vote is a victory for them. My guess is these are the same folks who decried Madigan blocking the Fair Map Amendment from the ballot last year. He was wrong then and House Minority Leader Jim Durkin is wrong now. Both issues should go on the ballot and let the people decide. If you’re afraid of democracy, you’re in the wrong business.
    The case of South Dakota v Wayfair was recently heard by the U.S. Supreme Court and has the potential to create some huge changes in the marketplace. At issue is a 1992 SCOTUS decision that prohibited states from collecting sales taxes on purchases unless the seller had a nexus (physical presence) in their state. It’s why so much of the stuff you buy on line is tax free. State governments complain because they are losing out on revenue. Brick and mortar retailers complain because tax-free competition puts them at a disadvantage. And, the e-commerce companies balk at paying sales taxes because, they say, there are more than 10,000 sales tax jurisdictions across the nation and trying to determine the correct tax rate, collect it and remit it to the proper authorities would be burdensome to the point of putting many of the smaller ones out of business.
    Here’s an idea: Rather than basing the tax on the buyer, base it on the seller. Generally, the sales taxes we pay are what’s called, “point of sale.” The tax you pay is based on where the item was purchased not on where the purchaser lives. That’s why you’ll pay more sales tax on an item purchased at the Edwardsville Dierbergs than you will at the Shop N Save across the street and it’s why smokers wait to buy their cigarettes until they’re over in Missouri. If you did the same with e-commerce, vendors would levy sales tax based on where they were located, not where the purchaser lived, so that would solve the problem of the 10,000 jurisdictions. It would also level the playing field between on-line and brick and mortar merchants because everyone would be charging sales tax. And, states would start reaping the rewards from those on-line sales. I think it’s a win-win-win.
    Finally, thank you to Gov. Eric Grietens of Missouri. He almost makes our Illinois governors look good by comparison.
    Alan J. Ortbals is president and publisher of the Illinois Business Journal. He can be reached at or (618) 659-1977.

Leave a Comment