retail news in context, analysis with attitude

The Washington Post reports that starting this January, a number of state legislatures will begin considering enabling legislation that could lead to sales taxes on all Internet and mail order sales.

However, the Post notes, even if the states come to an agreement about such taxes, they still will need approval from the US Congress.
KC's View:
We’ve always felt that for the foreseeable future, there ought not be sales taxes on e-commerce purchases because we hate to see anything happen to slow down this channel of trade. It needs nurturing, not obstacles to growth.

However, it is important to note that this holiday season, the Internet seems to be seeing a lot of growth, while many other retail venues are reporting lower-than-hoped sales. At a time when so many state governments are sucking wind when it comes to tax revenues and are looking for new funding mechanisms, not having sales taxes on e-commerce would seem to shut off an important source of dollars.

That doesn’t mean that we’ve changed our mind, and think that the time for nurturing is over. But we’re having second thoughts, trying to balance the needs of the channel vs. the needs of the government.

Tough call.