According to an article in a recent issue of the “Tax Administrators News,” a report from William Fox and Donald Bruce of the University of Tennessee estimates that in 2003, more than $20 billion in state and local sales taxes will go uncollected because of e-commerce sales that do not involve the collection of taxes from Web buyers. (Business-to-business sales account for about 70% of this total.)
Looked at by state, the estimates of sales tax losses range from $2.7 billion in California to about $32 million in Vermont, or about 2% of total state tax revenue for Massachusetts to nearly 6% of total tax revenue for Florida in 2003.