How E-Commerce Is Affecting State Revenues
Since the second half of the twentieth century, there have remarkable development in the application of digital technologies in e-commerce. This has had profound effects on the U.S economy. It has resulted to development of new products and quite innovative ways to sell, deliver, and receive these goods and services. There are new technologies which have affected almost all aspects of business process and industrial process which has affected productivity in the United States economy. Since the mid-1990s when the internet and other digital technologies became viable, new and pre-existing firms have benefited from integration of digital technologies and this has greatly affected the economic growth of the country. Digital technologies have facilitated development and growth of e-commerce. According to the U.S Bureau of Statistics, e-commerce sales increased from $995.0 billion to $2,385 billion between 1999 and 2006 representing a 13.3% annual growth (Bruce et al., 2009). However this rate of growth has not translated to positive impact on tax collection. Since 1960s, there have been concerns regarding the ability of the state and local government to collect sales taxes from e-commerce. As expressed in Quill v. North Dakota, the problem emanate from the inability of states to force remote e-commerce vendors to remit the tax. States and local governments have lost a lot due to their inability to collect sales tax revenues from e-commerce. This paper will look at the implication of growing e-commerce and the inability of states and local government to collect tax from e-commerce.