Internet Sales Bypass Sales Tax

Newswise — E-commerce has brought about sales boosts for companies with online stores, but in terms of sales tax it's a bust for state budgets. In a study recently published in State Tax Notes, UAB researchers found that in Alabama, like many other states, no sales tax on Internet purchases costs already cash-strapped state and local coffers hundreds of millions of dollars each year. "In Alabama the total projected loss to both state and local governments was nearly $410 million in fiscal 2004," said the study's lead author, Tommie Singleton, Ph.D., UAB assistant professor of information systems. "Until Congress passes enabling legislation allowing state Internet sales taxes or the Supreme Court overrides the Constitution's commerce clause, paying taxes on Internet purchases will continue to be voluntary."