E-COMMERCE – A TAXING DILEMMA – part 1

Internet “stores” have been allowed to sell products without collecting sales.  Sounds like a bargain for shoppers, and it is.  Meanwhile, brick-and-mortar stores are required to collect sales tax from their customers.  When local stores lose market share, 2 negative things happen to the state and local communities.  First, as sales tax collections fall, lost revenue must be made up through higher property taxes or user fees.  Second, as the value of shopping malls and retail centers fall, property tax revenue also declines.  Consequently, the state of Texas and its cities must look for alternative revenue to make up for the loss of retail market share to the Internet, according to Dr. Mark G. Dotzour, TX A&M Real Estate Center.