E-Commerce Surge May Hit Tax Revenue

The rapid growth in internet sales is great for online retailers. But it’s not such good news for state and local governments.

The Commerce Department reported Thursday that e-commerce retail sales totaled $44 billion in the fourth quarter last year, up from $38 billion a year earlier. E-commerce sales now account for 4.3 percent of total retail sales (which include lots of things that don’t get bought online, like new cars, gasoline and restaurant meals), up from one percent a decade ago. For the year, e-commerce sales totaled $165 billion.

Many of those online purchases didn’t have any sales tax attached to them. Long before the Internet was on anybody’s radar, the Supreme Court ruled that states couldn’t require that retailers without a physical presence in a state, like mail-order companies, charge sales tax on their behalf. In recent years, states have tried to find ways around that ruling. Last fall, for example, Texas said an Amazon.com distribution center in Dallas counted as a physical presence and sent the retailer a past-due sale tax bill for $269 million. This month, Amazon said it is shutting down the distribution center as a result of Texas’s “unfavorable regulatory climate.”

Read the rest of this post on the original site

Must-Reads from other Websites

Panos Mourdoukoutas

Why Apple Should Buy China’s Xiaomi

Paul Graham

What I Didn’t Say

Benjamin Bratton

We Need to Talk About TED

Mat Honan

I, Glasshole: My Year With Google Glass

Chris Ware

All Together Now

Corey S. Powell and Laurie Gwen Shapiro

The Sculpture on the Moon

About Voices

Along with original content and posts from across the Dow Jones network, this section of AllThingsD includes Must-Reads From Other Websites — pieces we’ve read, discussions we’ve followed, stuff we like. Six posts from external sites are included here each weekday, but we only run the headlines. We link to the original sites for the rest. These posts are explicitly labeled, so it’s clear that the content comes from other websites, and for clarity’s sake, all outside posts run against a pink background.

We also solicit original full-length posts and accept some unsolicited submissions.

Read more »