Mrs Baskett said the proposal would mean Kiwis contributed more to the tax bank and helped keep local shops alive.
"It doesn't make much sense to send everyone overseas and end up with no local businesses.
"I like it, because it will encourage people to use local business and they'll maybe use us more for purchases than as a shop front, where they use our expertise and then buy online."
Mrs Baskett said her business could not compete on price but prides itself on service.
"We have the knowledge. We don't spit out books you might like because you bought one. We tailor our service to individual people at the store. Usually our book is in stock - not two or three weeks away." She said books needed to be touched and looked inside.
An employee of Wendy's Boutique, which sold designer women's clothing, said the shop had benefited from an online presence, since many customers shopped at the website before coming in to try on clothing. The employee said Wendy's claimed back GST for customers who buy from outside New Zealand. "Definitely, online has given sales a boost," she said.
Smiths Sports Shoes co-owner Bruce Trebilco said his stores in Tauranga and Mount Maunganui had been losing sales to online merchants in the US and UK for awhile.
Mr Trebilco commended Mr Key's GST proposal, but said it would not be a quick fix.
"I think it will take a few years to get it up and running. It's not very simple."
He said some customers tried on shoes in-store before buying a similar product online.
Mr Trebilco said he had told employees to continue serving those shoppers.
"Unless they're really cheeky, we'll help them and still give them a good customer experience and hopefully they'll come back to us."
Mr Trebilco said he could not compete with shoes that sell for half the price in the States.
He said his business contributed to the community by employing at least a dozen people and sponsoring sporting events throughout the year.
One local retailer said international companies and Kiwi importers needed to rethink their pricing structure to compete in a global market.
Eastern Hi Fi owner Graham Whitaker said e-commerce had saved him hundreds of dollars on items such as tyres shipped from the States.
"We deal with companies like Bose [stereo speakers] - they have a global structured pricing system, so by the time you add GST and freight, it's cheaper to buy in New Zealand.
"We need more companies like that, so there's no point buying over in America."
