Can Charging Sales Taxes on Internet Sales Save Brick-and-Mortar Stores?

Journal of Accounting, Ethics & Public Policy 21(2): 263-274 (2020)

12 Pages Posted: 8 Jul 2020

See all articles by William Jens

William Jens

McNeese State University

Jeanne-Claire Patin

McNeese State University

Lonnie Turpin

McNeese State University

Date Written: June 12, 2020

Abstract

In October of 2018, Sears, a U.S. retail giant, filed for bankruptcy. Walmart, the largest U.S. retail operation, recently introduced a new business model whereby on-line orders can be picked up or even delivered. Both events can be seen as part of a major shift away from the traditional brick-and-mortar operations toward on-line retail sales and the big elephant in the room, Amazon. Twenty years ago, the Internet Tax Freedom Act was passed, halting direct taxation on internet sales. At the time, it was seen as a protection of a relatively fledgling industry. Recently, the Supreme Court ruled that states may charge sales taxes on internet sales. This study will look at relative growth rates of retail sales v. internet sales and draw some conclusions on the ability of brick-and-mortar stores to compete against internet sales operations going forward and the possible impact of charging sales taxes on all internet sales.

Keywords: Nexus, Use tax, E-commerce sales, Brick-and-mortar sales

JEL Classification: H20, M41

Suggested Citation

Jens, William and Patin, Jeanne-Claire and Turpin, Lonnie, Can Charging Sales Taxes on Internet Sales Save Brick-and-Mortar Stores? (June 12, 2020). Journal of Accounting, Ethics & Public Policy 21(2): 263-274 (2020), Available at SSRN: https://ssrn.com/abstract=3625647 or http://dx.doi.org/10.2139/ssrn.3625647

William Jens

McNeese State University ( email )

4205 Ryan Street
Lake Charles, LA 70609
United States

Jeanne-Claire Patin (Contact Author)

McNeese State University ( email )

4205 Ryan Street
Lake Charles, LA 70609
United States

Lonnie Turpin

McNeese State University ( email )

4205 Ryan Street
Lake Charles, LA 70609
United States

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