Our property values keep going down and our taxes keep going up. It’s the same old story, yet our states are all desperately trying to balance their budgets and looking for new ways to collect taxes from various sources.  If the government is really looking under every rock for tax revenue, what’s taking them so long to impose taxes on revenue earned from out-of-state sales? Currently, the only businesses responsible for collecting and paying sales tax from customers are those with a brick and mortar business in the customer’s state. Rather than outlaw the shipping of cigarettes to avoid the loss of taxes, why even have the exemptions in the first place?  One should think it has to be on the horizon and that it’s just a matter of time before shopping returns to local sources, both in brick and mortar stores and online sources, to save on shipping, because taxes will be in place nationwide.

How Out-of-State Sales Taxes Would Change E commerce

Local search is a more recent concept. Keyword rich domains built into eCommerce websites were intended to capture worldwide traffic in the language they were written in. The whole planet held customers and products could profitably ship anywhere the buyer lived.

Buyers shop wherever they find the best prices. The savvy consumer knows that if he/she can get something cheaper out-of-state with the shipping charges included, it was worthwhile buying online. When both the seller and buyer are responsible for taxes no matter where the store is located or the buyer lives, the lure of buying out-of-state is sure to decline, impacting sales for the seller and savings for the buyer. Local search results will become even more important as sellers go back to looking for customers in their own regions.

Billions Lost

Last November, Forbes reported that $11.4 billion dollars were lost each year in sales tax to online transactions. In December, several sources predicted 2012 would be the biggest holiday shopping season. Shoppers aren’t leaving the internet when gas prices are going up and their wallets keep getting tighter. If the government doesn’t get more people working to generate more income tax, they have to pursue every lost dollar they can think of.

New Online Stores

New businesses would be wise to pursue local search not only because of the future consequences of sales tax law changes, but also because it is easier to rank for less competitive, local keywords. If your shipping prices are reasonable and you can still offer the best price, then paying your customer’s having to pay taxes won’t hurt your business as much. Competing nationally may cut in to your profits more than It did it past years, but when no one is exempt from the tax law, your competition faces the same obstacle to overcome.

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About the Author:  Theresa Happe works with BuyDomains.com where you find domain names for any business or niche in any price range.