A new report from Jupiter Research says that while it is likely that a sales tax on e-commerce purchased will be imposed sometime in the next three-to-five years, it will not serve as a "significant impediment to the growth of the online retail channel."
This despite the fact that many online retailers and politicians argue that online sales taxes could kill the channel, and believe that the current moratorium on such taxes needs to be extended. In fact, according to the Jupiter study, most people don't shop online to avoid taxes.
The report concedes that given the current state of the economy and the need for federal and state governments to find new sources of revenue, avoiding online sales taxes is something of a pipe dream. Jupiter notes that a report by the University of Tennessee last year estimated that all 50 states could collectively lose more than $45 billion in Internet sales tax revenue in 2006.
This despite the fact that many online retailers and politicians argue that online sales taxes could kill the channel, and believe that the current moratorium on such taxes needs to be extended. In fact, according to the Jupiter study, most people don't shop online to avoid taxes.
The report concedes that given the current state of the economy and the need for federal and state governments to find new sources of revenue, avoiding online sales taxes is something of a pipe dream. Jupiter notes that a report by the University of Tennessee last year estimated that all 50 states could collectively lose more than $45 billion in Internet sales tax revenue in 2006.
- KC's View:
- Since we are in the contingent of people who believe that Internet sales taxes are a bad idea, we're actually surprised by this. Of course, our sense has always been that the combination of sales taxes and delivery fees would make products bought online more expensive…but if the Amazon-inspired trend toward free delivery continues to spread, maybe that won’t be as much of an issue anymore.
