06.20.11
US states that are struggling to balance their budgets are pushing legislation to require online sellers to collect sales taxes where they have a physical presence or where an affiliate has one. Industry observers predict that Congress may enter the fray as soon as this month with a bill to do the same.
By some estimates, uncollected taxes from all online sales could total more than $10 billion a year nationwide.
Traditional retailers say that with no tax to pay, online sites can offer sharply reduced prices on a regular basis, which gives them an unfair advantage.
A 2009 University of Tennessee study concluded that next year state and local governments are projected to miss out on $11.4 billion to $12.65 billion in sales taxes uncollected from e-commerce sales.
U.S. e-commerce sales among all retailers in 2012 are forecast to be $217.5 billion, up from this year’s projected $197.3 billion and an increase from $176.2 billion in 2010, according to Forrester Research. In contrast, in 1998 internet sales were $5.5 billion, the first year the research firm has data. Additionally, as online sales have grown, so has their share of retail spending, which in 1998 was only 0.47%. This year, the internet’s retail share is expected to be 9% and by 2015 increase to 11.1%, according to Forrester.
By some estimates, uncollected taxes from all online sales could total more than $10 billion a year nationwide.
Traditional retailers say that with no tax to pay, online sites can offer sharply reduced prices on a regular basis, which gives them an unfair advantage.
A 2009 University of Tennessee study concluded that next year state and local governments are projected to miss out on $11.4 billion to $12.65 billion in sales taxes uncollected from e-commerce sales.
U.S. e-commerce sales among all retailers in 2012 are forecast to be $217.5 billion, up from this year’s projected $197.3 billion and an increase from $176.2 billion in 2010, according to Forrester Research. In contrast, in 1998 internet sales were $5.5 billion, the first year the research firm has data. Additionally, as online sales have grown, so has their share of retail spending, which in 1998 was only 0.47%. This year, the internet’s retail share is expected to be 9% and by 2015 increase to 11.1%, according to Forrester.