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Local businesses fear online competition poses threat to Valentine's sales

By Luke Jones
Published On: Feb 12 2014 07:39:59 PM CST

Businesses face competition from online retailers who don't have to charge sales tax.

REXBURG, Idaho -

Valentine's Day is one of Main Street Diamonds' busiest times of the year.

"Valentine's, the month of February, and the whole's a very busy month for us,” said owner Rick Merrill.

But business isn't as good as it could be as many choose to shop online.

"Not really a fair playing ground,” Merrill said, referring to the fact that online retailers don't have to charge a state sales tax. Local jewelers like Merrill do, and he says it can make all the difference—especially with his younger clientele.

"The average wedding set purchased today is around $2,000, so that's a $120 savings. For a college student that's struggling, that's significant,” said Merrill.

To stay competitive, Merrill says he has to eat the difference.

"We don't want to lose a sale. We're gonna keep business here in town, but it would help if somehow legislation happened that would give the state and opportunity to benefit from these online sales by charging sales tax,” said Merrill.

Rexburg city council member Jerry Merrill said he's met with legislators about doing just that.

"It's a doubled-edged sword because then if we have local businesses here who want to sell things online, then it opens a whole big ball of wax for them because they have to keep track of all the sales tax rates from all of the different 50 states,” he said.

One proposal at the federal level would only require businesses with more than $1 million in annual online sales to charge a sales tax.

According to the National Retail Federal, the average American will spend around $134 this Valentine's Day, while 26 percent will do their shopping online.

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