In: Finance
Please Dont reply with Generic answer.
Does the growth of e-commerce affect sales tax revenue for state
and local governments? Explain whether Internet transactions should
be subject to sales tax or not. 3 source is appreciated.
Thank you.
In today's world the technology is one of the basic requirement of every business organisation. E-Commerce is the buying and selling of goods and services with the use of internet. According to sales tax in ternet transaction are not eligibile for tax. today mostly business houses are moving towards internet world and making shopping easier, it is today convient way for shoppers to search a product without roamig in the market. This transaction are now causing losses to goverment reveuse. business owners are now shifted from brick and morter concept to digital concept. following are some of examples that show how transaction are not taxed and causing losses to goverment:
1. Software are not covered under sales tax law which is included in one of large transaction. this is in digital form an it is tax free under sales tax law.
2. Auction sales in which houses are now sold over the internet wich also not taxed under sales tax law.
3. B2Btransaction are another examples of reducing goverment revenue by not being taxed under sales tax law.
INTERNET TRANSACTIONS SHOULD BE TAXED OR NOT?
1. Reducing goverment reveues because it will invovle huge amount of transaction. advocates claim tha t if such transation are tax free goverment lost its $4 billion.
2. Unfair advantage of internet is that E-Tailors are exempted from tax and other traditional retailers are being taxed.
3. Another side that E-Commerce is way of growing country which will be slow down. people wiil business to another businesses.
4. Reduction in sales as per research by Austan golsbee,an economic professor at the university of chicago graduate school of business claim if E-Commerce transaction are taxed 4 out of 3 will stop buying and selling things over internet.