To combat the rise of electronic commerce and expected losses in sales tax revenue, a suburb north of Chicago is promoting traditional sales with commercials on cable TV.
To combat the rise of electronic commerce and expected losses in sales tax
revenue, a suburb north of Chicago is promoting traditional sales with commercials
on cable TV.
Reacting to a bill in Congress that would extend the ban on Internet
taxes until 2006, Niles village Mayor Nicholas Blase said the suburb had
to do something to protect the $15 million it raises annually in sales taxes.
"Like many communities, we are dependent on the sales tax, and current
predictions say that online sales will increase 500 percent by 2005," Blase
said. "The bottom line is in terms of what we need to support our community
One advertisement focuses on fraud and other problems with online sales,
such as handling fees, getting the wrong item and difficulties in returning
an item. The other takes place in a shopping center, where shoppers discuss
the positives of traditional brick-and-mortar retail shops.
According to the U.S. General Accounting Office, states and localities
are losing anywhere from $300 million to $3.8 billion in taxes from online
Blase has contacted the other 130 suburbs in Cook County for support.
"A number have indicated interest," he said, adding that the advertisements
will run for three months. Although there has been a "tremendous media response,"
he said it will be difficult to quantify any changes in consumer preferences.
The village spent about $35,000 on the two ads, with money taken from
the village's general fund, which includes property and sales taxes.
NEXT STORY: California considers enforcing sales tax on Web