States do not currently collect sales taxes on consumer pruchases on the Internet. Who, consumers or suppliers, benefits from the absence of such taxes? Explain please.
Both benefit. The consumer benefits by not paying the sales tax. Suppliers benefit by attracting more customers.
Thanks, I thought that was it, but it seemed too simple.
In my economics class, we determined that both would benefit since there is no inefficiency caused by the tax
The absence of sales taxes on consumer purchases on the Internet primarily benefits consumers. This is because consumers are not required to pay additional taxes on their online purchases, which can ultimately result in cost savings for them.
When it comes to sales tax in the United States, there are different rules for online purchases compared to in-person retail transactions. In a traditional retail setting, businesses are generally required to collect and remit sales taxes to the state where the purchase is made. However, in many cases, online sellers do not have the same obligation, especially if they do not have a physical presence, or "nexus," in a particular state.
So, how does this benefit consumers? Well, the absence of sales taxes can make online shopping more affordable. Without the additional tax burden, the overall cost of the products or services purchased online may be lower compared to making the same purchase in a physical store. This can be particularly advantageous for consumers who frequently shop online or make large purchases.
It's important to note that while consumers may initially benefit from the absence of sales taxes on online purchases, some states have implemented or are considering enacting legislation to collect sales tax from online transactions. This is often referred to as "internet sales tax" or "e-commerce tax." Therefore, the situation could potentially change in the future, impacting the benefits consumers currently enjoy.
Overall, the absence of sales taxes on consumer purchases on the Internet primarily benefits consumers as it allows them to save money and potentially find better deals compared to in-store purchases.