Move over infomercials: A suburb buys cable time

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

services."

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

sales.

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.