The Effect Of Levying Taxes On Sales And Customer Purchase Behavior Online

Companies need to provide an omnichannel experience to their customers in order to keep them. However, with the huge variety of retailers and brands, it is becoming harder and harder to maintain customer loyalty. Another problem may arise from the fact that currently the U.S. legislators are enforcing laws on making online retailers to collect sales tax. Up until now, the law has been enacted in at least 12 states.

Many states view collecting use tax on smaller purchases as burdensome, therefore states have customarily attempted to collect a use tax only on big-ticket items that require licenses—such as cars and boats. Many states over the last several years are increasing enforcement efforts of the use tax laws to get the state population to pay the taxes due in an attempt to combat internet ordering. The realities of limited resources as well as the complexities involved with tracking down minor purchases and demanding that a use tax be paid are limiting the collection efforts.

Although taxes are inevitable, the way states tax their citizen may be vastly different. I compared two states in order to understand the contrast and comparison between their state’s tax system. I chose to research the tax systems of Oregon and Florida. Oregon and Florida are two states that are distinct from each other not only in location but in their state’s tax system as well. Oregon is heavily dependent on a personal income tax, however, Oregon is not dependent on sales tax by all means. On the other hand, Florida is highly reliant on sales tax, however, Florida holds no need for a tax on personal income. Ultimately, these two states are gaining enough taxes for them to continue to survive. This does not mean, however, that both

One microeconomic concept Proposition 56 relates to is supply, demand, and equilibrium. Taxes imposed by the government reduce both demand and supply, and cause the market equilibrium to increase and quantity to decrease. Consumers will not want to purchase because of the increase in

In the article entitled “You Can’t Sugarcoat the Facts: Taxes Influence Behavior,” Dr. J.D. Foster (2015)—Deputy Chief Economist at the United States (U.S.) Chamber of Commerce—avows that there is a communal consensus amongst economists and quasi-economists alike that taxes sway human behavior. As C. Eugene Steuerle (2008) asserts within the contents of his book entitled Contemporary U.S. Tax

Taxes policy is one of strategies that states have to increase their competitiveness. From 51 states nation-wide, only five states that do not impose sales tax or 0% sales tax rate. They are Alaska, Delaware, Montana, New Hampshire and Oregon. Without sales tax, in this five states, people can buy everything without spending extra dollar for tax, which mean they will have extra ‘money’ for saving or spending to other goods compared to other states because some of states impose both income and sales tax.

There is also confusion regarding what is Constitutionally acceptable in the online marketplace. Many consumers and businesses believed that taxing products over the Internet was not allowed. . This misconception was cleared up in infamous Quill Corp. v. North Dakota case, which created the “nexus” law. This case has greatly effected the taxation of Internet sales. It stated that there must be a large physical presence of a company in a state for that state to lawfully require the company to collect taxes inside the state (Andes & Atkinson, 2013). With the growth of the Internet, many of these misconceptions are attempting to be understood through various forms of legislation.

Taxes play a huge party in the United States of America. Taxes are peoples and entities contribution to society to pay for all the things society provides us with. Money moves from consumers to business when people buy goods and services. When the economy is increasing and growing consumers earn more and make more purchases. Through all the purchases the government collects sales tax. The government collects money from the market purchases but provides goods and services. “The tax budget is divided into both mandatory and discretionary spending, depending on how it is allocated each year”(Reference/Government). The first time the government initiated tax was for the civil war in the 1860’s but then it was repealed in 1872. In 1913 Congress

Consider the town of Tritown with only three residents, Ed, Jim, and Tony. The three residents are trying to determine

On the other side of the issue, the liberals or pro side on Internet taxation mainly use logos arguments to get their point across. Many state leaders are frustrated that collection of taxes on mail-order transactions has been banned and do not want to lose another source of revenue such as the Internet. David Coursey, an Internet industry analyst argues that, “If e-commerce is to grow, it needs to pay its own way before we wake up one morning and realize that communities have lost big chunks or their precious local tax dollars” (Internet Taxation par. 33). This could all be a

According to recent news, Rep. Fred Costello filed a bill (HB 1181) that would eliminate property taxes and replace them with increased sales taxes. Several studies have found that commercial and industrial investment tends to be more responsive to tax rates than residential investment. This means that the increasing shift of the property tax burden to businesses may cause them to reduce or eliminate commercial investment, leading them to investment in other areas where the property taxes are less burden. Studies have shown that tax breaks for residential property, such as Save Our Homes, will increase housing prices for the benefited properties. Higher property taxes suppress housing prices. The dissimilar nature of the tax burden caused by

Myntra.com is ranked among the leading e-commerce companies in India and is the largest online retailer of lifestyle and fashion products. The company was started by a group of IIT/IIM graduates in 2007 and is headquartered in Bangalore. Funded by top tier Venture Capital Funds, Myntra is among the best funded e-commerce companies in the country today.

Use tax, is a sales tax that is not collected by the retailer. A use tax form should be filed by anyone making a purchase from an online company. Most people don’t realize taxpayers are legally obligated to report the amount of sales tax they did not pay. This should be reported on either their annual state income tax forms or by filing a separate use tax form. There are billions of dollars in unpaid taxes, due to the rapid growth of Internet purchases.

One of the most evident and thought provoking aspects that we see as consumers on a daily basis is the effect of sales tax. The effect of sales tax vary from the examination of how much this tax can increase our purchases. To why there are higher and lower tax percentages based on different purchases. Knowing that this tax is in place determines the actions of both sellers and consumers. With sales tax continuing to evolve and change certain bills such as the Remote Transaction Parity Act of 2015 have been put into place and action.

This study 's framework was of a statistical nature. The researchers took statistical data from two different years and compared them against each other, with the only changing variable between the years was an increase in sales tax on tobacco products. The data that was collected indicated that there was a decrease in tobacco sales compared to the year before. Thus, validating the null hypothesis by showing a direct relationship between consumption of cigarettes and price. By looking at the observed ration of reduced consumption to increased price ( 12.1%: 30.2% = 0.40) we can estimate the price elasticity. This elasticity shows the responsiveness of the demand of the product versus its change in price. This ratio was an expected value and shows direct correlation to consumption of tobacco products and there price and is consistent with similar studies done on tax increases on tobacco (Amato, et al., (2015).