ALBANY — After the chaos of Black Friday weekend comes the relatively calm of Cyber Monday, and with it goes billions of dollars in uncollected sales tax dollars that would otherwise go to states and local governments.
But is it a fair trade? Retailers say a growing amount of the revenues generated in the post-Thanksgiving Day weekend shopping boom is coming through online retailers.
The Herald asked people on Facebook Friday why they choose to shop online instead of heading out to a traditional bricks-and-mortar store, and the answers ranged from convenience to reduced stress to convenience to free shipping to convenience to bigger selection. Oh, and did we mention convenience?
“Why fight the crowds when you can shop in your PJ’s!” Leigh Jacaman posted.
For Michelle Woodard, living in Tifton has its shopping limitations.
“I live in Tifton, Ga., and shop online because I live in Tifton, Ga.! There aren’t any major retailers other than Walmart and Kmart here and you work fulltime and have a family so I can’t make it to shop an hour or more away from home very often,” Woodard said.
Some say they are just thrilled to avoid all of the hassles of standing in line with people who may not be as merry as one might think.
“I don’t have to deal with rude, inconsiderate people who cheat, skip and bumrush people who have been patiently waiting in line in the cold,” Molly Steen Johnson posted. “Do unto others people!”
For these reasons and others, people are turning to the Internet to do their holiday shopping and, thanks to a 1992 U.S. Supreme Court ruling that prevents states from charging sales taxes to retailers who don’t have any “physical” presence in the state in which they are operating, much of it goes untaxed. Some contend this hurts local businesses who do tax goods.
According to a report published through the New Rules Project — a program of the Institute for Local Self-Reliance — online retailers that are allowed to forego sales tax collections disadvantage local small business, undermine state and local governments and “make a regressive tax more regressive because only those with Internet access, a credit card, and a home or workplace where they can accept daytime deliveries are able to take advantage of the tax exemption.”
A 2009 study by the University of Tennessee reported that states had lost as much as $7.7 billion in 2008 alone from uncollected sales taxes on e-commerce.
And while Cyber Monday may quickly become a thing of the past as retailers seem less and less likely to wait to put their best deals online following Black Friday, e-commerce is showing no signs of stopping. And the data seem to support the shift. Cyber Monday is becoming more significant as online retailers try to grab a larger share of the marketplace earlier each year.
The e-commerce blog site CyberMonday2011.com shares statistics from past Cyber Mondays.
According to its statistics, in 2005 consumers spent $608 million online during Cyber Monday. That figure jumped by 21 percent in 2007 to $733 million and another 15 percent in 2008 to $846 million. In 2009, growth increased modestly by 5 percent to $887 million. There were no data available for 2010.