E-commerce may hurt schools

Published 12:00 am Saturday, December 18, 1999

ERIK SANZENBACH / L’Observateur / December 18, 1999

RESERVE – We may be living in a wondrous age of computers, the internet and e-commerce, but to some members of the St. John the Baptist ParishSchool Board this new technology and new way of doing business could mean a sharp decrease in revenue for education.

President Richard DeLong expressed alarm Thursday that the increase in on-line shopping could seriously deplete the sales tax monies the School Board depends on to run the public school system.

“Thirty-eight cents of every dollar used in the schools is sales tax,” said DeLong, “and the internet is cutting into that sales tax.”Right now there is no sales tax at all on internet sales, and for states like Louisiana that depend on sales tax for government revenues this could mean dire consequences.

Nathan Stein, director of finance for the St. John Parish School Board, saidhe believes internet sales have increased by 200 percent in the past year though there are no real records of it. By law, Stein can’t even ask aninternet business for their sales figures because they do not charge a sales tax.

“I will be interested in seeing December sales tax figures, ” said Stein.

“That may show us how much e-commerce has eaten into our revenues.”Stein doesn’t see much relief in sight for the school board in the future.

“Congress is unwilling to tax e-commerce,” Stein reported. “Just like theywon’t tax catalog sales. I am not encouraged that anything will be done,and eventually that will hurt us.”Even if legislators agree to tax the internet, Stein doesn’t see how they will do it. Not only do sales tax rates vary by state, but also by parish,county and municipality.

“How they are going to do it is not clear,” said Stein. “They may have toapply a uniform tax on all e-commerce.”DeLong instructed School Board attorney John Diasselliss to draft a resolution they can present to Gov. Foster, the state Legislature, Congressand all the school boards in Louisiana informing them of the danger and urging them to help try and come up with a solution to taxing sales on the internet.

“We will have to come up with an alternative form of revenue,” said DeLong, “because taking away the sales tax means the end of the school system.”

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