March 21, 2011
With states scrambling to find ways to generate revenue, tax-free online shopping is becoming a target increasingly being focused in the crosshairs, reports the Associated Press (AP).
Billions of dollars annually are bypassing the reach of state taxing agencies after the 1992 Supreme Court ruling prohibiting a state from forcing businesses to collect sales taxes when the store has no physical site located in that state.
The exact amount of uncollected taxes from online sales is unknown but a 2009 study from the University of Tennessee estimated that it might total $10.14 billion this year, assuming total e-commerce sales of $3.49 trillion. Most sales however are from one business to another and would not be subject to the same taxes as consumer purchases are.