So, were you one of those Cyber Monday people, clicking away at your desk and looking busy while actually holiday shopping online? You weren't alone.
Internet sales on the Monday after Thanksgiving were up nearly 14 percent over 2008's Cyber Monday -- considered to be the biggest day of the year for online sales. Recession? What recession? Spending of an average order was up more than 38 percent. (That average was about $180, by the way.) At the peak of shopping, more than 3.1 million people per minute around the globe were checking out online shopping sites.
OK, now that you have the shopping taken care of, you just need to run the numbers and give the state its due. Let's see, if you're in Iowa, and you spent the $180 average, you owe the state $10.80.
You were planning to pay up, weren't you? After all, those items aren't really tax-free.
Most states -- including Iowa, Illinois and Wisconsin -- have a "use tax" that consumers are supposed to pay on out-of-state purchases in which sales tax is not collected. Most online companies don't have to collect state sales tax, so -- no surprise -- they don't. But consumers are supposed to pay the
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It's OK. You don't need to go on the lam if you haven't paid up. Almost no one pays the tax. And the state has bigger pots to stir than tracking down your 11 bucks
But that doesn't make it right. Every day we read stories about how states are struggling to maintain programs and services with decreasing revenue. Here's an area where states are missing out on tens of billions of dollars in tax revenue nationwide.
And what about your local drug store or hardware store? It's difficult enough to maintain sales in a sluggish economy. Local stores also have to compete with online retailers who have the advantage of not charging sales taxes. It just isn't fair.
The rules of when taxes apply go back to a 1992 Supreme Court ruling that says it would be a burden for retailers to collect sales tax if they don't have a physical presence in the state where the customer is located. That made sense in 1992. People weren't doing a whole lot of online shopping in 1992. Yet Congress has made no attempt to change the rules.
New York put the rules to the test last year when it passed a law requiring online retailers like Amazon.com to collect taxes on sales to customers in New York. Amazon's court challenge failed and an appeals court has yet to rule on the matter. Other states should be closely watching the New York case closely.
Internet retailers are no longer fledgling businesses struggling to survive. It's time to end the special treatment.
Editorials reflect the consensus of the Telegraph Herald Editorial Board.
