Internet Sales Tax Could Change Consumer Habits

Some 49 percent of consumers would change their online
spending habits if they were required to pay an online sales tax,
according to the Compete
Online Shopper Intelligence Survey
.

The Compete survey found that if Internet companies
collected sales tax, some 10.6 percent of consumers would spend more
in stores, and 4.2 percent would shift all their spending
offline. Another 10.8 percent said
they would spend more offline and at online retailers with stores who
currently have to pay sales tax, while 10 percent said they would shift all
online spending to online retailers with stores.

Some 51 percent said their buying habits would not be
impacted.

Asked why they would spend more at offline retailers, 46
percent of those respondents said they would be more price-sensitive if sales
tax were collected. Another 44 percent answered they would prefer to have the
in-store return option, while another 27.8 percent preferred the in-store pickup
option. 

The study concluded: “Consumers who are treating traditional
bricks-and-mortar retailers as an ‘Amazon showroom’ to check out products, then
go home and buy them, might be apt to splurge right in the store for that next
flat-screen TV as opposed to [waiting] for three days for that TV show up at
their house.”

Jewelers of America last year launched
a campaign
in favor of “sales tax fairness.”  Jewelers can contact legislators about the issue here.

Senator Dick Durbin (D-Ill.) is planning to introduce a bill
that would require a
national collection of sales tax
for Internet purchases.

Illinois
passed an Internet sales tax law in March, requiring online companies with
affiliates in the state to collect the state tax. In response, Amazon fired all
of its affiliates in Illinois. Arkansas
passed similar legislation in April, followed by Connecticut
in May.