Move over infomercials
- By Daniel Keegan
- Aug 03, 2000
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.