Amazon’s  Tax Problem: First Business interviews IRMA Senior Counsel Tanya Triche in a story explaining why tax-free online shopping may soon be a thing of the past. WATCH

Chicago – What’s at stake for Illinois if Sears Holdings Corp. decides to pull up stakes and move out? David Vite, of the Illinois Retail Merchants Association joined FOX Chicago Sunday to talk about what it would mean to lose the parent company of Sears. WATCH

Some retailers in Illinois are lobbying for E-fairness nationally; a move to require online vendors to charge sales tax just like brick-and-mortar businesses. GO TO STORY

SPRINGFIELD — Illinoisans who buy the latest best-selling book as a Christmas gift on Amazon.com will pay $12.99. Buy the same book at a local bookstore and they’ll pay an extra 81 cents. The bookstore isn’t charging more. It’s collecting Illinois’ 6.25 percent sales tax, which online retailers without a physical presence in the state don’t have to collect. GO TO STORY

An Illinois retailers group is endorsing bills in Congress that could settle the battle over sales taxes between online sellers and brick-and-mortar stores. GO TO STORY

More retailers are going back to the past this Christmas season, and offering layaway to help customers manage their holiday gift buying.

Layaway was a popular option in the 1950s, but when credit cards became mainstream, layaway lost favor. Layaway programs allow a customer to put a certain percentage down on an item, and then pay periodically until the item is paid off and the customer takes it home.

“The last few years we have seen an increase in layaway with the downturn in the economy. It’s a low risk, high reward way of getting a gift,” said Peter Gill, manage of communications for the Illinois Retail Merchants Association.

Gill said layaway is an option for customers who no longer have credit cards as well as for those who don’t want to use credit.

He pointed out that credit card use for holiday gift giving has declined, according to a news release from the National Retail Federation. The most popular payment methods are debit cards and check cards.

“It’s really important to offer layaway in these times. It’s a very reasonable way for people to afford gifts,” he said.

Gill said retailers are offering layaway as a way to compete.

“As one store does it, then the others do. It’s a good deal for customers and there’s a benefit for the retailers because they are not losing business to customers who say they can’t afford the gift,” he said.

While layaway is returning to many big box stores including WalMart, Sears, and Toys R’Us, many small retailers never stopped offering layaway.

“A lot of independents have done this for loyal customers for years. They are king of their own domain and they do it to help their customers out,” Gill said.

At Wheel Werks Bikes in Crystal Lake, owner Bob Olsen said the store has always offered layaway and doesn’t charge any extra fee.

“You can put down 10 or 20 percent. They may find a really good sale bike, we put it aside for them and when they’re done paying it’s theirs,” he said.

“It’s a lot easier to work with small businesses. It’s how I’d want to be treated. We make it easy for people,” Olsen said.

Ross Stevens of JCs Guitars in Algonquin said the store has offered layaway since it opened.

“We don’t have our own financing, so it’s another mode for customers if they want to avoid credit card fees. The customer can pay as they please and they don’t have to worry about interest or fees,” Stevens said.

He said offering layaway often results in a customer buying a higher-priced item.

“If they can pay for it over time, they are willing to pay more. They may have gotten a $300 guitar; now they may go for a guitar that is $600 or $700,” he said.

Most major department stores offering layaway charge a $5 fee and some charge interest. At some department stores, not all items are available for layaway. Stores generally have a minimum price that is eligible for layaway and a deadline for completing the purchase. Some also have a cancellation fee. Some stores, like Best Buy, only offer layaway in select stores.

U.S. Sen Charles Schumer of New York has been critical of layaway, charging that customers may not be aware of the full costs of layaway, which he says could be more than the costs of using a credit card, in a AP article.

“I think he’s comparing apples to helicopters. Credit is a completely different animal than layaway. The stores are making money with layaway because they are making a sale,” he said.

Maybe the recently shuttered Borders bookstore chain did not perish in vain.

After years of wrangling between online retailers and states uncertain about how to collect sales taxes from Internet transactions, a welcome breakthrough has arrived — though it’s too late to help Borders.

Legislation spearheaded by U.S. Sen. Dick Durbin is drawing bipartisan support, and we hope it takes the fast track on Capitol Hill. It embodies compromises that should make it attractive to all sides in this long-running dispute. Online retail giant Amazon gives the measure “strong support,” though rival eBay still opposes it for now.

We think we know how Borders would have lobbied, had it not liquidated this year. The book retailer’s management deserved blame for strategic blunders that ultimately sank it. But the company also came under pressure from online competitors that could offer the same merchandise as Borders but without collecting sales tax.

That advantage reaffirmed the Internet as an effective marketplace but also exposed the unfair edge that the Amazons of the world have over brick-and-mortar businesses. Multiply those factors nationwide and you see why state governments lose nearly $10 billion a year in sales taxes that aren’t collected on online purchases.

No one likes paying taxes. But everyone should be assessed fairly. For the record: Consumers making online purchases always have been obligated to pay sales tax to their state. Illinois recently tried to collect it by putting a special line on the state tax form for self-reporting how much taxpayers owed for their purchases. Didn’t work too well. As a practical matter, the money needs to be collected by online merchants at the time of the transaction — the same way brick-and-mortar stores have done for generations.

Durbin’s Marketplace Fairness Act replaces his earlier Mainstreet Fairness Act, which we also supported. The new version has a broader exemption for small operators: Companies with less than $500,000 in online sales won’t have to collect taxes. That’s an extraordinary concession to the online sales industry, considering how every storefront up and down Main Street is stuck charging sales tax no matter how tiny its revenues. The only justification for that exemption is the technologically antiquated idea that online startups would be snuffed out by the complications of collecting different taxes in the many jurisdictions where they operate.

Fortunately, the bill addresses those complexities. States that want online merchants to collect sales tax would need to adopt rules that streamline and simplify collection practices, if they haven’t already. No state would be required to comply, and some may decide to continue giving online merchants a sales-tax pass.

Durbin and his co-sponsors have made this legislation about as friendly to e-commerce, and as respectful of state tax sovereignty, as it can get. Now they need to pass the bill.

They will be helped in that effort by the precedent set in Illinois, where Gov. Pat Quinn and the General Assembly this year approved legislation that confronted the Internet retailers head-on. It was a brave stand in the face of Amazon’s threats to shutter its local business affiliates.

Because the federal government has jurisdiction over interstate commerce, a nationwide solution to this tax problem always made the most sense. Now we’re on the verge of getting one.

To Durbin’s colleagues in Congress: Remember Borders — and your constituents who used to work there (and, ahem, dutifully collect sales tax from shoppers). Then pass the Marketplace Fairness Act.

Chicago uses some 3 billion polyethylene bags every year. Progressive 1st Ward Ald. Proco “Joe” Moreno wants to decrease that number significantly. Moreno introduced a proposal earlier this month to prohibit plastic bags at retailers larger than 5,000 square feet. The legislation would put the city in company with San Francisco—which banned plastic bags in 2007 and reduced consumption to a trickle of 3 million a year. Besides plastic grocery bags handed out by the likes of Jewel, it also would forbid all plastic carryout bags, but not the bags on rolls in the produce aisle.

If the proposed ordinance passes, does this mean environmental progress or more unneeded guidance from the nanny state? We spoke with Moreno and Tanya Triche, senior counsel at Illinois Retail Merchants Association, which strongly opposes the bill.

Triche:

A bag ban is like a tax.
“Retailers believe that this is really a tax on the retail community, and that’s because when you ban plastic bags, it forces retailers to purchase more paper bags. Paper bags on average cost about 10 cents per bag, and plastic bags cost 2 to 3 cents.”

An exemption for biodegradable or compostable bags doesn’t help.
“Those bags are more expensive. Compostable bags are only good if you have somewhere to compost them. I don’t believe we have many facilities where you can send your bags for composting. Biodegradable bags do not biodegrade in landfills; they need certain conditions to biodegrade.”

People tend to reuse plastic bags.
“If they have pets, for diaper disposal, for the smaller trash cans around the home.”

The city already has a bag-recycling mandate that’s catching on.
“People are starting to understand the program is there and are starting to bring their bags back. [Chicago retailers recycled or reused 1.2 million pounds of plastic bags in 2010.] Which is great, because those bags are used to create other green industries, such as flooring and decking. Recycling is the way to go: It feeds green industry and gives people a choice and a responsible way to dispose of the bags.”

Moreno:

Big retailers can handle a bag ban.
“ALDI and Trader Joe’s don’t use plastic bags, Whole Foods doesn’t. The industry has already proven that they can be profitable without the use of these.”

Plastic bags are on the way out; they just need a nudge.
“When is the last time anyone saw a Big Mac Styrofoam container? The industry and the government got together and got rid of that. In a couple years, we’re going to look back and say, ‘Gosh I can’t believe we used those petroleum-based bags that do so much harm to our environment.’ ”

A ban would stimulate a green market.
“[If] the big boxes can’t buy [polyethylene] bags, they’re going to have to buy something. The industry is going to gravitate to the soy-based, corn-based biodegradable, recyclable bags. If the whole industry, 3 billion bags, starts buying those, the price will come down and the little guys can buy them. Right now, they’re exempt.”

A ban will save the city millions.
“It saves city taxpayers dollars because we don’t have to clean these bags out of our sewers, out of our trees, our parks, our empty lots. You talk to any sewer tech, anytime they go to clean the sewer out, they’re pulling out all these bags.”

The recession has left a record number of people out of work.

The state has been borrowing money from the federal government to cover the growing demand for unemployment benefits.

The governor, lawmakers, labor and business leaders negotiated a deal to reform the state’s unemployment system.Unemployment Insurance Reform

NAPERVILLE, Ill.  — Local business owners are looking for a more level playing field, and are backing legislation that would require Internet retailers to collect sales taxes too.

As WBBM Newsradio’s Bernie Tafoya reports, David Vite of the Illinois Retail Merchants’ Association says all retailers want is for state laws to be applied equally.

He is in favor of legislation proposed by U.S. Sen. Dick Durbin (D-Ill.), which would close a loophole that allows Internet stores to avoid collecting state sales taxes if they do not have a physical presence in the state.

Becky Anderson, the owner of Anderson’s Bookshop at 123 W. Jefferson Ave. in Naperville, says she is affected personally by the loophole.

She told a Naperville Area Chamber of Commerce Legislative Committee luncheon that customers pick her brain on book choices, then go home and buy from some other company off the Internet.

Vite said that the avoidance of sales taxes has led to brick-and-mortar establishments going out of business, which led to a loss of property taxes and added stress to the rest of a municipality’s property tax base.

He stressed to the chamber of commerce committee that collecting sales taxes online was not a tax increase, only the fulfillment of a law that was already on the books, but seldom enforced.

Vite said that Amazon has already agreed to the sales tax, but EBay was still opposed to it on the grounds that it would hurt small traders that used the service.

He estimated that Illinois alone would gain $400 million currently, with the total increasing to about $1 billion by 2020, if the Internet taxes were collected.

Dick Furstenau, candidate for the DuPage County Board and a former Naperville City Councilman, spoke in favor of the legislation, noting the stress put on local municipalities by dwindling sales tax bases.

“The only place left (to get money) is out of your house,” Furstenau said. “It’s the only place left to raise taxes.”

Vite said that the 6.25 percent sales tax from the state included a fixed portion that would be returned to municipal coffers automatically. But he said various local and county taxes would not be collected by the proposed legislation.