State considers taxing Hawaii shoppers who buy online

Instead of heading out to the store, DeMont Conner says the money goes a lot farther using his phone.

"Online shopping is becoming the best way to shop in Hawaii," said Conner.

For years, Conner has used the internet to purchase everything from household goods to clothing, saying deals online are far better than what's offered in the store.

"Everything is just priced too high. The local community, especially us on the west side, it's like we're priced out of the market," said Conner.

But a bill proposed by State Rep. Isaac Choy could cut into Conner's savings. HB398 requires online retailers to send shoppers a reminder that they will have to pay tax on what they bought.

At the end of the year, consumers would then receive a statement itemizing all online purchases.

"That would more likely than not be accompanied by a line in future tax returns where we put in an amount of use tax that we owe on the purchases that we made for consumption in Hawaii," said Peter Fritz, attorney.

The state says it appreciates what the bill is trying to do and suggested online retailers who collect the excise tax for Hawaii would not have to send the purchase reports to customers.

The latest estimate shows Hawaii is losing out on more than $122-million a year in uncollected taxes from online sales. Internet merchant Amazon is dominating the scene in terms of growth, and the U.S. Department of Commerce says the company earns close to 50 cents for every new dollar spent online.

The retail giant is also effecting brick and mortar stores.

"I believe that there are some retailers that are struggling. They're seeing a bigger shift going to online stores," said Tina Yamaki, the president of Retail Merchants of Hawaii. She supports the proposal, calling it a fairness tax.

"We just want a level playing field with everybody," said Yamaki.

In the meantime, Conner says he's tired of being nickle and dimed by the state.

"The government needs to check itself.  Constantly trying to find ways to tax our population to death," said Conner.

This bill is modeled after a law that was passed in Colorado.

Copyright 2017 Hawaii News Now. All rights reserved.