Online shopping convenient for customers, but not state coffers
Posted November 22, 2012
Updated November 23, 2012
While some folks still love to line up for Black Friday, more and more consumers are shopping online.
It's definitely more convenient, but it's also digging a big hole in the state budget.
A popular iPad, for example, lists for $729 at a big box store, where customers can expect to pay $49.10 in state and local sales tax at checkout.
But customers who purchase the same item online will save the tax dollars. Multiplied by millions of households statewide, and the dollars add up to millions.
“We’ve gotten some research that indicates we could potentially lose as much as $214 million this year based on e-commerce transactions,” said Beth Stevenson with the state Department of Revenue.
The problem is a matter of law.
If sales tax is not added to the final bill online, the consumer is supposed to report it on his yearly tax return. But Stevenson says a lot of people don't realize that and don’t pay. And there’s no good way to track the ones who don’t.
“Kind of our basic goal here is just to make sure that everyone is aware of their obligations and paying their fair share,” she said.
State officials say Congress will have to deal with the problem. There are a couple of bipartisan bills in the works that would require all retailers to collect state taxes.
In the meantime, Stevenson says, consumers should save their receipts to make it easier to track what they owe in sales taxes.