Study Says Internet Tax Losses Overstated

WASHINGTON -- U.S. states lost $2.8 billion last year in uncollected Internet sales taxes, much lower than previous estimates, according to a study released by a business group on Thursday, Reuters reported.

Other studies have confused different types of online transactions and relied on fuzzy numbers to arrive at their figures, the Direct Marketing Association said. As a result, the amount of potential revenue that cash-strapped states are missing out on has been grossly overstated, report author Peter Johnson said.

"The Internet is not creating a massive leak in state coffers," Johnson, a DMA economist, wrote in the report.

The DMA report estimates that states will miss out on $4.5 billion in tax revenue in 2011, while a University of Tennessee study estimates that states will lose $54 billion.

-- NYSSCPA.org News Staff

Posted on 03/14/03