‘Tis the Season for Sales Taxes

The New York Times acknowledged Black Friday (when did the Thanksgiving Day Plus One shopping extravaganza acquire that name?  Is it so named because it’s the day that puts retailers into the black for the year?  I would call it “Shopping Orgy Day”) with an editorial calling for online retail sales to be taxed.  (Yes, You Owe That Tax)  Saying “[o]nline retailers who do not collect sales tax enjoy a significant and unfair advantage over rivals who must add the tax to their prices. They also cost the states billions of dollars a year in lost sales tax revenue . . . ” the Times  lauds the 2008 New York state “Amazon Law” making online retailers responsible for collecting taxes on sales to New York residents.  Every semester for many years I have told students that e-commerce sales taxes were a question of when, not if.  One of these years I’ll be right.

3 thoughts on “‘Tis the Season for Sales Taxes”

  1. It is interesting to note that The New York Times is asking retailers/consumers to pay online taxes, when the state of New York could be increasing their sales tax revenue by dropping their 3.5% "vendor discount." As noted by the tax article linked below, about half states give back to retailers a percentage of their sales taxes collected, as an incentive to collect taxes from consumers. In many states this amounts to a huge sum that goes from State X's Treasury right back into the pockets of private corporations. If states want to increase their revenues, they should consider ending these types of systems and find a more efficient and economical way of enforcing sales tax collection.
    http://taxprof.typepad.com/taxprof_blog/2008/12/s

  2. On-line business will definitely suffer if they are required to collect taxes. They will lose about 30-40% of their customers because people are not going to want to pay taxes and shipping costs. The shipping costs are outrageous. If you buy items in a store, there is no shipping. I ‘d rather pay the taxes and avoid the shipping because the shipping amount is too excessive. I agree with you that eventually there will be an e-commerce sales tax. It’s just a matter of time. However, on line businesses will need to have incentives for continued business from customers. An idea would be to charge the sales tax and just charge a minimal flat rate shipping and include a free gift with the purchase.

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