Santa not coming to state revenue coffers
Drudge had a headline today that read "Wal-Mart to Launch Advertising Blitz To Salvage Season".
TheStreet.com says, Holiday Blues
Instapundit has been pushing the theory that online shopping is behind the weak retail numbers,
This is a trend that will only get stronger over time, especially as more people get broadband connections and the price of PCs continue to plummet. It's just so damn easy to shop online. No nasty people, parking troubles or crowds but most importantly, no sales tax. The impact of online shopping is really huritng states ability to collect sales tax. For example,
Hmm. Maybe all my talk about the growth in online shopping this
Christmas season is right. Just saw a segment on Kudlow & Cramer saying that
online shopping is way up, and that it may be partly responsible for the
softness in other retail sales. And apparently a lot of women are shopping
online for the first time this year
The states don't like to see their mothers milk taken away and they are plotting their strategy,
Ohio says it's loss for the state's 88 counties could be about $100 million
and Michigan officials estimate their state will fail to capture more than $200
million in the current fiscal year.
The states -- united under the banner of the "Streamlined Sales TaxNo kidding, people aren't volunteering to pay more taxes? John Kerry was on to something.
Project" -- are building the legal and technical foundations for a system in
which online merchants would be required to collect taxes on all Web sales and
forward the money to the state where the buyer lives. The states are working to
harmonize their tax laws in effort to convince Congress to overturn a 1992 U.S.
Supreme Court ruling that said such a plan would overburden out-of-state sellers
with a confusing patchwork of tax regulations.
Keep in mind that when you buy something over the Internet, even though
many online retailers don't collect taxes at the point of sale, you probably are
still required by law to report the purchase to your state's bean-counters. Most
states have so-called "use tax" laws on the books that require citizens to
report and remit taxes on items they buy out-of-state and online, but such laws
are notoriously tough to enforce and very few consumers bother to comply with
This could turn out to be a great fight between the great unwashed (us) and the politicians (them) desperate for more of our money. Pressure from the public is behind the recently renewed three-year ban.
Red Herring, Dec. 2004
Online spending will surge 23 to 26 percent over last year’s holiday shopping
season, consumer research company comScore Networks predicts, as web sites are
expected to make more than $15 billion during November and December this year.
Given the factors cited above, in three more years the amount of online shoppers will really be huge and the states will be even more desperate. If we don't keep bitching, they'll keep pinching.