360° Coverage : Retailers That Collect Online Sales Tax Lose Business

2 Updates

Retailers That Collect Online Sales Tax Lose Business

Apr 29 2014, 3:09pm CDT | by

Online retailers have argued for years that they’ll lose business if they have to collect sales taxes on their online transactions. A new study by three researchers at Ohio State finds they are right...

Filed under: news

 
 
 

17 weeks ago

Retailers That Collect Online Sales Tax Lose Business

Apr 29 2014, 3:09pm CDT | by

Online retailers have argued for years that they’ll lose business if they have to collect sales taxes on their online transactions. A new study by three researchers at Ohio State finds they are right. Paradoxically, the study may increase support by some online sellers for federal legislation to standardize collections across states. The study, by Brian Baugh, Itzhak Ben-David, and Hoonsuk Park, looked at five states that required Amazon.com to collect sales taxes. Once Amazon stated collecting, consumers in those states bought 9.5 percent less from the firm. Not surprisingly, the authors found that consumers were especially likely to change their shopping behavior to avoid tax on more costly items. For instance, they cut spending by 15.5 percent on purchases larger than $150, and by nearly 24 percent on goods or services that cost $300 or more. The authors also looked at where those consumers did buy. Most just shifted to other online sellers (that, presumably, did not collect sales tax). For instance, many simply bought from Amazon Marketplace merchants that are accessible on Amazon’s site but do not have to collect tax. Only a handful—about 2 percent—took their business to local bricks-mortar retailers, the study found. Those Main Street firms do have to collect tax. The study, published as a working paper by National Bureau of Economic Research, looked at sales data from California, New Jersey, Pennsylvania, Texas, and Virginia before and after they required online sellers with a physical presence in their jurisdictions to collect sales taxes. In practice, the levy applied only to Amazon and a handful of other e-tailers. Technically, of course, buyers still owe tax whether the seller collects or not but, in reality, almost no-one pays these use taxes. The Ohio State study is the latest research that appears to confirm that buyers change behavior to avoid paying sales tax. About a year ago, three researchers from Stanford and one from eBay found similar results after reviewing data from the firm’s online marketplace. They found that a 1 percentage point increase in a state’s sales tax rate leads to a 3-6 percent decline in
 
Update
2

3 days ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new comp ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

4 days ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double trage ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

India offers red carpet, not red tape, Modi hard sells India (Roundup)
Tokyo, Sep 2 (IANS) Prime Minister Narendra Modi Tuesday hard sold India to Japanese investors saying that his country offers only a red carpet and not red tape while dubbing his five-day trip to Japan that ends Wednesday as "very successful".
 
 
Fear grips onlookers as Ebola victim walks through market
Monrovia, Sep 2 (IANS) A video footage has emerged from Liberia showing a person tagged positive for Ebola virus disease (EVD) walking through a busy market, sending hundreds of horrified onlookers fleeing in fear, a media report said Tuesday.
 
 
Half of British young women cannot locate vagina
London, Sep 2 (IANS) Half of young women are unable to properly label a vagina on a medical diagramme, while 65 percent admitted having a problem simply using the words "vagina" or "vulva", a British survey has revealed.
 
 
Nepal, India to hold energy talks
Kathmandu, Sep 2 (IANS) Officials from Nepal and India will be meeting in New Delhi Wednesday and Thursday to hold talks on the much-touted Power Trade Agreement (PTA) between the energy-starved nations.
 
 
 

Latest from the Network

Britain asks citizens to review travel plans to Pakistan
Islamabad, Sep 2 (IANS) The British Foreign and Commonwealth Office (FCO) has advised its citizens to review their planned trips to Pakistan in view of the volatile security situation in the country. "There is a high...
Read more on Politics Balla
 
Jaime King: Motherhood is all that matters
Jaime King says her son is the most important thing in her life now. The 'Sin City: A Dame to Kill For' star welcomed her first child James - her son with husband Kyle Newman - into the world last October and since she...
Read more on Celebrity Balla
 
Chris Brown pleads guilty to assault
Chris Brown has pleaded guilty to assault. The 'Beautiful People' hitmaker was sentenced to time already served by a judge after accepting a plea deal at a Washington DC superior court today (02.09.14), where he was...
Read more on Celebrity Balla
 
Piers Morgan confirms CNN departure
Piers Morgan has confirmed he is leaving CNN after turning down a new deal. The British presenter - whose show 'Piers Morgan Live' was axed by CNN earlier this year - took to his Twitter account on Tuesday (02.09.14)...
Read more on Celebrity Balla
 
Helen Mirren is learning Italian
Dame Helen Mirren is learning Italian. The 69-year-old actress owns a villa in Salento, South-East Italy, with her husband Taylor Hackford and although the couple also have homes in London, Los Angeles and France they...
Read more on Celebrity Balla
 
Number of displaced civilians inside Ukraine doubles: UNHCR
Geneva, Sep 2 (IANS) The UN High Commissioner for Refugees (UNHCR) Tuesday said the number of people displaced inside Ukraine has doubled in the past three weeks since the ongoing fighting in eastern Ukraine is driving...
Read more on Politics Balla
 
15 troops, 50 militants killed in Ukraine clashes
Kiev, Sep 2 (IANS) At least 15 troops and 50 pro-Russian militants have been killed since Monday as Ukrainian forces engaged in fierce fighting against militias in the country's eastern regions of Donetsk and Lugansk...
Read more on Politics Balla
 
India offers red carpet, not red tape, Modi hard sells India (Roundup)
Tokyo, Sep 2 (IANS) Prime Minister Narendra Modi Tuesday hard sold India to Japanese investors saying that his country offers only a red carpet and not red tape while dubbing his five-day trip to Japan that ends...
Read more on Politics Balla
 
Indian woman charged for having illegitimate child
Dubai, Sep 2 (IANS) An Indian man filed a case in a court in the UAE against his wife, who gave birth to a child in 2010 despite their not having sex for eight years, a media reported said Tuesday. The man, who is...
Read more on Politics Balla
 
Captain Marvel 'will not appear' in Guardians of the Galaxy 2
Captain Marvel will not appear in the 'Guardians of the Galaxy' sequel. The movie, which has proven to be an enormous commercial and critical success, has already been lined up for a sequel - but director James Gunn has...
Read more on Movie Balla