The drive to implement an online sales tax has increased in recent years, thanks to the efforts of leading retailers and local government authorities. In terms of the former, retail giant Walmart has lobbied extensively and led the charge to secure a change in the taxation law, with a view to eliminating the supposedly unfair advantage held by online businesses. Local authorities have also been keen to support the bill, primarily because states lost an estimated $12 billion in potential tax revenue to online purchases throughout 2012.
Consumers would no longer be able to benefit from purchasing tax-free items online, which may force those on a minimal budget to reconsider their choices of retailers. Research in 2011 revealed that 25% of consumers said their behavior would be impacted by the implementation and specific rates of sales tax.
From a business perspective, the implementation of a sales tax will theoretically level the playing field upon which online and offline businesses ply their trade. Although sales tax rates vary considerably, from between 1 and 10% depending on individual states, their laws and any featured exemptions, retailers such as Walmart and Amazon have argued that the current legislation puts them at a 5 to 10% disadvantage by forcing them to charge sales tax on their transactions.
BoweryJE22
I certainly would purchase less online if this sales tax was implemented! Great post!
This tax would certainly level the playing field between online and brick and mortar retail products. I am no economist either so I would not know of the effects of applying more tax on Walmart and Amazon products but I guess we may find out!