It’s
the 21st century and technology has become a huge part of our lives.
We now have the luxury of shopping from the comfort of our own home; that brand
new shirt you’ve always wanted is just a click away. You can thank the Internet
for making online shopping possible, not only is it convenient it’s also
tax-free. Due to tax-free online shopping, large online retailers such as
Amazon and eBay have the ability to undercut prices even more than a brick and
motor store. As a result, this has led to the demise of several stores such as
borders and different mom and pop locations.
It may be a huge threat to other stores but a huge plus for consumers
who like saving money and like getting the best bang for their buck. Unfortunately,
it seems like those tax-free days are soon coming to an end for online
shopping. However, this topic has its pros and its cons for both sellers and
buyers.
There
has been a “Massive shift in support for online taxation and even Amazon is
ready to admit it,” according to the Wall Street Journal. Amazon’s change of heart is due to their
desire of increasing shipping times to their customer. In order to make that
possible, Amazon would have to build numerous distribution centers in places
such as: Florida and New Jersey. By building more distribution centers it will
definitely bring much more jobs into each of the states. Government Christie
has agreed to postpone online sales tax collections for Amazon for a year so
this plan can be implemented. According to WSJ, Amazon has also made similar
agreements with three other states; however, Florida did not agree.
The
pro’s of online taxation is that the different states are poised to pull an
additional $23 billion yearly on online sales tax. The con’s for the consumers is a probable hike
on online prices to cover the cost of tax collection, plus the applicable taxes
on every sale. Unfortunately, small online storeowners will also have to
implement the new taxations. Another pro is that Brick and Motor owners can be
at a huge benefit because they could be the big winners in the online tax war.
Online taxation will help keep prices much more competitive than previously and
most likely drive consumers back to local stores where they do not have to deliver.
Sources:
Interesting. I am glad you cleared up part of the reason behind the shift. Increased distribution locations are increasing the jobs per state so it is definitely a positive. At the end of the day it is all business and we will see the change as no tax online markets are almost completely scarced. $23 billion is alot of money so I see where the demand is coming from and Amazon is making good strategic plans to keep their customers satisfied.
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