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sales tax - All posts tagged sales tax

  • Aug 3, 2011
    11:30 AM ET

    The End of Tax-free Online Shopping?

    iStockphoto

    One of the big advantages of shopping online — avoiding the sales tax — could be gone in a matter of years.

    Today’s Wall Street Journal has an article on the strategies Amazon.com uses to avoid charging sales tax in most states, which helps the online retailer undercut its local competitors’ total price by up to 8%. Currently, 45 states have laws that require any retailer with a physical presence there to collect tax on in-state transactions. Some states go further, requiring collection if the retailer develops products in the state or has online-advertising affiliates based there. It’s a matter of time before tax is collected on all online purchases, says Scott Peterson, executive director of the Streamlined Sales Tax Governing Board, a state collective.

    In addition to the growing number of state laws governing online sales tax, Congress is currently considering a national tax for online retailers. At the heart of the matter: lost revenue, reports the WSJ. A 2009 report from the University of Tennessee estimated that state and local governments will lose $10.1 to $11.3 billion this year in uncollected sales tax. Consumers are supposed to report untaxed purchases on their tax returns, says Peterson, but few do.

  • Jul 29, 2011
    3:30 PM ET

    The Only 4%-Off Sale Consumers Go Wild For

    iStockphoto

    Bargain-hunting consumers have learned in recent years to pass up small sales and wait for 40% off or better. The rare exception: state sales tax holidays, which have the power to bring shoppers out in droves.

    Sixteen states are offering holidays this year (see the full list below), and the first, Mississippi’s, runs July 29 and 30. In most years, the 4% to 6% most consumers save during such a holiday isn’t worth the gas to get to the mall. But this year, with retailers’ back-to-school sales kicking in early and a less-than-stellar economic outlook, shopping while the tax is waived is a smart move, says Jeff Green, an independent retail analyst. “Everything is already on sale, and probably as low as it’s going to go, once you hit August 1,” he says.

    The National Retail Federation expects consumers will spend slightly less this year due to economic constraints, and even a 4% savings knocks $24.15 off the average family’s $603.63 tab for back-to-school spending. (If you have a college student, that’s at least $32.35 off their $808.71 in supplies.)

About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.