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Blog Post

We now collect enough internet sales taxes to cut the tax rate

19 Jan 2017
0 Comment
TruST

By Jonathan Johnson, Chairman of the Board of Overstock.com

Utah’s Gov. Gary Herbert and other internet tax proponents proclaim Utah’s uncollected e-commerce sales tax has reached $200 million a year. It’s a large number. And it’s largely wrong.

Supposedly, the shortfall results from out-of-state e-commerce retailers not collecting Utah sales taxes. But is $200 million the number right? It doesn’t seem to add up.

Here’s a back-of-the-envelope calculation of all 2016 e-commerce sales taxes due in Utah:

• The 2016 total U.S. retail e-commerce is $392 billion (estimates from Internet Retailer and eMarketer).

• Utah’s e-commerce visit share is 0.84 percent, based on the assumption e-commerce sales are proportionate to visits (Source: Hitwise and Connexity); coincidentally, that figure approximates Utah’s population proportion of about 0.9 percent.

• The average Utah sales tax rate is 6.53 percent (https://www.salestaxhandbook.com/utah).

• Therefore, Utah’s total e-commerce sales tax due — collected or not — would be $215 million: ($392 billion x .0084) x 0.0653 = $215 million.

If this calculation is correct, then either Utah is not collecting more than 90 percent of its e-commerce sales taxes, or the governor’s $200 million figure is wrong

READ MORE at Salt Lake Tribune

About the Author
Led by the American Catalog Mailers Association (ACMA), Direct Marketing Association (DMA), the Electronic Retailing Association (ERA), and NetChoice, TruST believes that Congress should not overturn the physical presence standard in Quill without first requiring by statute the simplification of sales and use taxes within the States as well as simplification of the administrative requirements for collection and auditing of those taxes.

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About Us

The True Simplification of Taxation (TruST) Coalition represents American businesses in the fight to keep interstate commerce and competition free from unfair tax burdens imposed by states where our businesses have no operations or representation.

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Larry Kavanagh Details Further Challenges of Collecting Multi-State Sales Tax in Expert Report in Alabama Litigation

01 Mar 2018

The Hill - The hidden controversy over online shopping

26 Oct 2016

Businesses Unite Behind Goodlatte Sales Tax Plan

01 Sep 2016
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