State Taxation of Internet Sales and Interstate Commerce

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Internet commerce has been considered to be among the fastest growing business in the American economy. The fact that the transactions in this business are done online, it relatively have limited if not free of regulations and taxation. Due to the limited regulations, it has been hard for the government to impose taxes on the products sold online as well as the interstate business in general. According to the research that was conducted by Goolsbee, it indicates that when relating to the impact of the historical circumstance, the majority of the individuals in the US don’t pay the sales taxes on the good that are bought over the internet (Goolsbee 13).
Due to the lack of tax imposed on these sales, several states, as well as local officials, have been agitated since the rise internet sales and the interstate commerce erodes and interferes with the required developments that should be done by the states and the local government. Most, if not all, of these governments, are depending on the taxes made from the commercial sectors. And also the high increase of the online sales and the interstate business is killing the physical sales that are done in the US because most of these physical sales have a relatively higher price for the products than the online sales due to the taxes that the business owners have to pay (Mclure 731). Once there are limited sales made by the business organizations that sell their products in the states, a limited return is got by the government hence making the States activities to lag behind.

Most of these problems have been as a result of the act that was passed by the Congress in 1998 called the Internet Tax Freedom Act (Goolsbee 13).
Work cited
Goolsbee, Austan. “The Implications Of Electronic Commerce For Fiscal Policy (And Vice Versa).” Journal of Economic Perspectives 15.1 (2001): 13-24. Web. 25 Nov. 2018.
Mclure, Charles E. “Electronic Commerce, State Sales Taxation, And Intergovernmental Fiscal Relations.” National Tax Journal 50.4 (1997): 731–749. Web. 25 Nov. 2018.