Should Internet Purchases be taxed Essay Example | Topics and Well Written Essays - 500 words

Should Internet Purchases be taxed - Essay Example Projected estimates of lost revenue due to decrease in sales taxes collection, go as high as $55 billion by 2011. Interestingly now many of the retailers are providing option of "in store" pickup after ordering online, which ironically enforces sales tax collection as sales tax is compulsory on store pickup. (Leonard). State and local governments are worried that lost revenue may decrease their ability to provide civic services at expected levels since expected revenue from store front retail sales are being increasingly cannibalized by online retail (Yegyazarian, Anush 54). If increasingly larger amounts are siphoned off then to make up for loss either newer stream of income has to be realized (by increasing taxes) or by cutting spending (thisnation, Dec 2006). Many retailers go to great lengths to avoid physical presence in high sales tax states, because they can use a lacuna in the "laws" and save significantly on paying the sales taxes. Economist Goolsbee argues that imposing taxes on cybershopping may "could cause online sales to drop Shopping days without the avoidance of sales tax may be transient.