Forrester

Why Read This Report

As state and local economies face deficits and prospects of bankruptcy, the opportunity to grow revenues by requiring tax collection for online sales has resurfaced as a hot topic in eBusiness and public policy circles. Much of the push toward collecting online sales tax is actually borne of efforts from physical retailers that are waging a valiant effort to level the playing field against web-only merchants such as Amazon.com and eBay. Physical retailers perceive these merchants as having an unfair advantage and stealing wallet share by appealing to thrifty shoppers who are able to skirt paying sales tax when they buy from web pure plays. However, two facts will likely ensure that there will be no significant changes mandated by governments to the current sales tax collection efforts for online purchases in the near term: These decisions are ultimately state-by-state issues that would take years to take effect in the best of circumstances, and 2012 marks an election year that will be particularly rife with anti-taxation sentiment.