Move over infomercials

To combat the rise of electronic commerce and expected losses in sales tax

revenue, a suburb north of Chicago promoting traditional sales with commercials

on cable TV.

Referencing the bill in Congress that would extend the ban on Internet

taxes until 2006 — although the bill does not ban sales taxes — village

of Niles Mayor Nicholas Blase said the suburb had to do something to protect

the $15 million raised 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 services."

One advertisement focuses on online 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 bricks-and-mortar retail shops.

The U.S. General Accounting Office issued a report last week that said

states and localities are losing anywhere from $300 million to $3.8 billion

in taxes from online sales.

Blase said he has also contacted the other 130 suburbs in Cook County

in an effort to gather more money and create national advertisements. "A

number have indicated interest," he said.

The advertisements began three weeks ago and will run for three months,

Blase said. Although there has been a "tremendous media response," he said

he realizes it will be difficult to quantify any changes in consumer preferences.

The village spent about $35,000 on the two ads, taken from the village's

general fund, which includes property and sales taxes.


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