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State sales taxes head online
Gary Share hopes a change in Georgia's tax code that's now in effect will help sell a few more guitars like the one he pulled from a display on his wall Friday.

The $300 guitar at his Glynn County store, City Music, would cost a total of $318 after the addition of 6 percent in sales taxes.

Until this week, the same guitar bought for the same price from an online seller located outside Georgia would have been exempt from the sales taxes - 6 percent in Glynn County.

That has now changed.

Online retailers must now collect a state sales tax of 8 percent on all purchases, whether or not the seller has a building in Georgia. Internet retailers that do not collect the sales tax will be hit with a use tax paid to the Georgia Department of Revenue through income tax.

The state hopes the new rules will produce as much as $18 million in new revenue.

Previously, only retailers with an actual building or business presence in Georgia, like Home Depot, Walmart or Macy's, were required to collect the tax.

Share hopes the change will lead more people to begin shopping locally instead of going to the web.

"I think it could help local stores a little," Share said.

He has never tried to compete with online catalogs that he said can sell more expensive items like high-end guitars cheaper because they require a smaller profit margin.

With the code change, plus the shipping and handling fees, Share is optimistic more people will consider local stores for such items first.

Woody Woodside, president of the Brunswick-Golden Isles Chamber of Commerce, said stores like City Music have lived with the competitive disadvantage for years.

He is optimistic local stores will benefit, even if only a little.

"Most small business owners will feel they are getting a little more of a level playing field," Woodside said.

Brunswick resident Andy Buie often buys car parts online and was not happy to hear about the state's new tax code.

"I think it is a rip off, to be honest," Buie said.

If the price on a part is comparable at a local store, Buie said he will go there, but despite the added online tax, he does not plan to quit shopping online.

Most online stores will likely find a way to encourage people to keep shopping with them, Buie predicted.

Kenneth Heaghney, Georgia's state fiscal economist, said the law attempts to level the playing field.

"It may be that these sellers adjust their pricing so that customers don't see an increase," he said. "Or they may pass along all or some of the tax to customers."

The code changes still have plenty of questions surrounding them, Heaghney said.

The validity of similar laws in New York and other states are being challenged legally, he said.



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