State, Local Governments to lose at least $11.4 billion in sales tax revenues to Internet by 2012
If anything, today’s headline might understate its case. Not only is “State and Local Government Sales Tax Revenue Losses from Electronic Commerce” the e-commerce paper of the year, it could very well be the must-read study of the past several years.
Written by the University of Tennessee’s e-commerce dream team of Donald Bruce, Associate Professor of Economics; William F. Fox, William B. Stokely Distinguished Professor of Business; and LeAnn Luna, Associate Professor of Accounting, this 32-page report was published April 8th and released for public consumption in the following week.
According to the study, state and local governments will lose approximately $11.4 billion to $12.65 billion (yes, that’s billion with a “b”) to uncollected Internet sales tax revenues per year by 2012. The aggregate six-year loss in the time frame they considered would be between an astounding $52 and $56.3 billion. These numbers do not even take into account remote purchases and use taxes that should flow from mail-order, catalog, and television sales.
To place this study in context of the bigger picture, most notably how it may help to lay the groundwork for the Sales Tax Fairness and Simplification Act, review this post. If you haven’t followed the SST link already, which has been included in our Links list from Day 1, today might be a good time to review it anew.
For a direct link to the April 8th study and to the Rockefeller study, discussed here, visit the newly launched t2sa.org site (more on the newly budding t2sa to come in an upcoming Sales Tax Buzz post) or here (where the Streamlined Sales Tax site lists these two documents, and only these two at this point, as “Supporting Documents” to its cause — that’s how important these studies are to the topic).
And would the International Council of Shopping Centers (ICSC) need more reason to support the Simplification Act? Is NetChoice, the “Voice of the eCommerce Industry” that “has worked long and hard to oppose SSTP efforts to force catalog and online retailers to collect sales taxes in states where they have no physical presence” reading this study with disdain? 
Filed under: E-Commerce, SST Tagged: | Amazon Tax, brick and mortar, Donald Bruce, E-Commerce, Internet sales tax, internet tax, Main Street Fairness Act, sales tax fairness, Sales Tax Fairness and Simplification Act, SST, State and Local Government Sales Tax Revenue Losses from Electronic Commerce, University of Tennessee, William B. Stokely, William F. Fox
Have to agree this is a must read paper regarding ecommerce and sales tax. It will be interesting to see how things develop over the next few years.
This is legislation that will affect consumers and retails in unnecessary ways. If the States would simply enforce existing Use Tax law, there would be no need for SST or worries about collecting Internet Taxes. Details here: http://www.thedumbdog.com/blog/?p=62
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