Business & Tech
Geneva Alderman Says Cities Need a Cyber Monday Sales Tax
First Ward Alderman Chuck Brown wonders aloud whether municipal governments' future solvency might hinge on a cyber sales tax.
Although a clearer picture is promised on Thursday, when major retailers report their November sales, all indicators show that national and international online sales were booming on Cyber Monday.
IBM Benchmark says online sales for the Monday after Thanksgiving were up "a whopping 33 percent" over last year's totals, according to an article on the VadorNews website.
Apparently, IBM has an online tracking initiatiive that measures such things. Its report says the average order rose 2.6 percent to $193.24—which means people are not only shopping via their computers and hand-helds more frequently but spending more per purchase.
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Under the category of New Business at Monday's City Council Committee of the Whole meeting, Geneva 1st Ward Alderman Chuck Brown wondered aloud if maybe Geneva needs some of that estimated one-day $1.3 billion online sales bonanza.
"This is something we should think of as affecting Geneva in the long run," Brown said. "Over time, local sales tax will presumably go down slightly, and I think we’re going to have to take this into account."
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City Administrator Mary McKittrick agreed that Internet sales taxes could be a boon if Congress passes legislation proposed Nov. 9 by Democratic Illinois Sen. Dick Durbin and Republican Sens. Mike Enzi of Wyoming and Lamar Alexander of Tennessee.
"There is case law in place that applies to catalog sales from years gone by that also might be applicable to online sales,"McKittrick said. "Some retailers collect and pay sales taxes, some do not, some are retroactively collecting.
"It gets paid to the state," she said. "It’s supposed to go back to the community if there’s a nexus."
A nexus is a store location. Some have defiined that as a single store—like the in Geneva, for example—and some as a company's home office or warehouse.
Truth be told, Geneva's sales taxes have been last year and so far this year. Pretty darned good news, considering the economy overall.
But Brown said, with so many people shopping online, it's important for Geneva to get its sales-tax foot in the door—or maybe the Window.
"I think it’s good for the country that we have this Cyber Monday," he said. "But I don’t think it’s necessarily good for Geneva."
