Sales Taxes and Internet Commerce

Levin, Jonathan, Liran Einay, Dan Knoepfle and Neel Sundaresan. "Sales Taxes and Internet Commerce." Technology Academics Policy, July 26, 2012.

From the article:  "Since the birth of internet commerce, online transactions across state lines have not been subject to the sales taxes payable on traditional retail transactions. Following a 1992 ruling by the US Supreme Court, it is only if an online retailer has a physical presence in a state – a store, an office or a warehouse – that it is obliged to collect sales tax from customers resident in that state.

There are growing demands for this to change. With internet retail in the United States now worth well over $100 billion dollars annually and the majority of transactions occurring across state lines, forgone taxes on those sales could amount to as much as $10 billion a year. Such revenues would be particularly welcome at a time of pressure on state budgets. Taxes on internet commerce would also be popular with store-based retailers struggling to compete with their online rivals." Read more

See also

Einav, Liran, Dan Knoep‡e, Jonathan Levin and Neel Sundaresan. "Sales Taxes and Internet Commerce ."