A Look Back At Inflated “Lost Sales/Use Taxes” Reports – Not Even Close To Reality

Just a quick post regarding the supposedly lost sales/use tax revenue.  There have been posts on the topic already regarding the guesswork and ridiculously inflated numbers of lost sales tax/use tax revenue being floated around due to remote (Internet mainly) sales.   The National Conference of State Legislatures quotes massive losses referencing the massively flawed report from Doctors Bruce and Fox. Link to the numbers:

http://www.ncsl.org/research/fiscal-policy/collecting-ecommerce-taxes-an-interactive-map.aspx#2

 

Tennessee is the epicenter of the report and has been leading the fight for the Marketplace Fairness Act.  Amazon started collecting at the beginning of 2014 for TN. Their fiscal year is June 1st.  Keep in mind that supposedly for 2012 Tennessee had estimated losses of approximately $750 million dollars, $410 million due to electronic sales.  As a point of reference, the total for ALL of Tennessee’s sales and use tax was only $590 million.  This give a pretty good indication of how crazy and off-base these numbers were.

TN Data (Sales and Use Receipts, Source : TN Department of Revenue). Rounded to nearest million.

  • 2011 – $555 million
  • 2012 – $590 million (+35 million, 6.24%)
  • 2013 – $597 million (+ 7 million, 1.18%)
  • 2014 – $630 million (+ 33 million, 5.54%) – First year (1/2 year) Amazon collecting sales tax for TN shipments
  • 2015 – $668 million (+ 48 million, 7.62%) – First full year Amazon collecting sales tax for TN shipments
  • 2016 – $686 million (+ 9 million, 1.28%) – Amazon full year of sales tax collection as well.

See the giant windfall that was being lost?  Neither did I.  That’s because the assumptions were terrible and wildly overstated and didn’t include the reality that a number of key online retailers are national chains and already collecting sales tax for most/all states that have a sales tax.  Keep in mind that most states have had increased sales tax revenue due to an improving economy, further reducing any increases due to Amazon’s new collections.

Comments

  1. Shared on my FaceBook Group: Stop Sales Tax Fees Now!
    https://www.facebook.com/groups/stop.sales.tax.fees.now/

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