US Shoppers Reject Online Tax

A survey of more than a thousand US citizens has indicated that 61 per cent have rejected plans to impose an online sales tax.

The effects of the tax are expected to hit British retailers (see our post on May 6) because companies will have to facilitate collecting the tax and sending funds to individual states. That could mean filling dozens of tax returns every month. 

The US senate last week supported the Marketplace Fairness Act by 69 votes to 27 but, perhaps unsurprisingly, US shoppers are less enamoured. It will need to be approved by the House of Representatives before it becomes law. 

In the survey, by postal firm Endicia, 61 per cent said they didn't support the tax, 44 per cent of respondents said they would buy fewer products online if it came into force and 12 per cent said they would buy more products at traditional stores near their homes. However, 40 per cent said it would make no difference to their shopping habits.

A total of 74 per cent of the 1,095 respondents had heard of the legislation, 60 per cent said the changes would be bad for the US economy, 39 per cent approved the bill and one third of those who approved said it would bring a level playing field for traditional bricks and mortar retailers who cannot avoid sales taxes. 

At present responsibility for declaring the tax is on the individual shopper who then should fill in a state tax return. However, few do. The proposed legislation will shift responsibility to retailers according to the state where the purchaser lives.

Online retailers with less than $1 million in annual internet sales would be exempt from collecting taxes.