Taxes on Remote Sales
This election brief from the Kem C. Gardner Policy Institute at the University of Utah examines the complexity of online sales taxes.
Americans are making more and more of their purchases online. Since 2000, the share of retail sales taking place online has grown almost ten fold. Yet, not all online retailers are required to collect taxes and only a small percentage of individuals report online sales in their annual tax filings.
Quantifying the amount of state and local taxes that go uncollected is difficult. The National Conference of State Legislatures estimates that uncollected taxes on remote sales across the country totaled more than $23 billion in 2012. The Utah Office of the Legislative Fiscal Analyst estimated the uncollected taxes in fiscal year 2016 totaled approximately $230 million.
This election brief examines the complexity of online sales, including the legal context and the growth of online sales, and provides some policy options for consideration.