Is the Purchase Worth "The Online Sales Tax?"

Online shoppers and Businesses once upon a time enjoyed sales tax free environment. Companies, depending on location, are now required to charge their consumers sales tax on online orders.  Regardless of the amount, this has an effect on both the seller and buyer.

 Depending on the percentage of tax that is required of consumers, they may feel as though making a purchase online may no longer be worth it. This may so because not only did they initially have shipping and handling to worry about, but in addition there is the added cost of having to pay sales tax on top of that.

This could more so affect the sale of electronic. If a consumer decides to make a purchase via an online store they would for example have to pay the cost of the product, which is let us say is $300. Then they would have the shipping and handling cost which could be $30 and plus sales tax which would amount to $70 and the total being $400. This would be compared to buying the product from within a physical store where the product would cost $300 and the sales tax would amount to $70, totaling $370. Had the online store not have to charge sales tax it would have cost the customer only $330 for the product and in stores, it would have cost $370. Due to the addition of online sales tax consumers would now be prone to shopping in stores rather than making a purchase online.

Of course this may only seem significant when dealing with very expensive products such as electronics. Consumers may not mind sales tax if the amount is only $5 on a $100 purchase of clothing and so may be more willing to pay the price of convenience.










Sources:

http://www.nolo.com/legal-encyclopedia/sales-tax-internet-29919.html
http://www.reuters.com/article/2012/10/08/us-smallbusiness-salestax-idUSBRE8970OH20121008