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Groups Survey Consumers on Internet Sales Taxes
12/15/99
How does the average consumer feel about sales taxes on Internet retail purchases? The answer varies according to different organizations attempting to influence the Advisory Commission on Electronic Commerce (ACEC), which is wrapping up its meeting in San Francisco today.
The bulk of ACEC's meeting is being devoted to proposals on taxation of goods purchased on the web. Several groups making presentations to the commission have surveyed consumers on the issue and uncovered some conflicting results.
The e-Fairness Coalition—a group that includes major retailers such as Wal-Mart, a number of shopping center developers, and several retail associations including the American Booksellers Association—surveyed 600 registered voters by phone. About 63% of the respondents said that existing sales taxes should be applied consistently to all retail purchases, both in stores and online. Under current law, online merchants do not have to charge sales taxes unless the purchaser is located in a state where the merchant has a physical location.
Similar findings came out of a survey conducted on behalf of the National Association of Counties and the U.S. Conference of Mayors. That study determined 72% of 1,000 respondents felt it was unfair online sellers could avoid sales taxes for most customers when physical stores were required to charge taxes on all in-store purchases. About 60% also said they would support a sales tax system for online purchases.
However, a different sort of picture emerged from surveys sponsored by other groups. A political poll conducted in Iowa in conjunction with the presidential campaigning underway there showed little support for online sales taxes. Half of the 402 Iowans surveyed said that Internet purchases should remain tax-free and only 37% said they felt Internet sales taxes were necessary. On the other hand, respondents did not see the Internet sales tax issue as a critical deciding factor in their choice of a new president.
Another survey—conducted by BizRate.com in partnership with the Association for Interactive Media—found that consumers already making purchases online were not particularly interested in paying sales taxes. Almost 60% of the 17,000 respondents said they would buy fewer goods online if they were forced to shell out sales taxes, with purchasers under the age of 35 most likely to cut back on their Internet shopping. The items buyers would be least likely to buy online if they had to pay sales taxes are computer wares and entertainment products.
ACEC is a congressionally appointed commission charged with making recommendations on Internet taxation, international tariffs on e-commerce, and Internet access taxes. The commission is supposed to submit its recommendations to Congress in April.
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