Report: Westchester has lost more than $91 million in uncollected e-commerce taxes

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Westchester County lost an estimated total of $91.4 million in sales tax revenue from e-commerce sales between 2011 and 2013, and Rockland has lost $24.7 million, according to a new report from the National Association of Counties, National League of Cities and the United States Conference of Mayors. Rockland has lost $24.7 million, it said.

Yonkers lost $9.7  million during that time, and New York City, more than $620 million, the analysis found.

These are the losses in Lower Hudson Valley counties for 2011, 2012 and 2013, and the total in the fourth column:

salestaxloss2

The report said state and local governments across the country lost nearly $12 billion in uncollected e-commerce taxes in 2011 and nearly $14 billion this year. For counties, the totals were almost $1.3 billion in 2011, $1.5 billion in 2012 and a projected $1.7 billion this year.

The increase in online sales has accelerated the rate of sales tax revenue losses, the report found. The growth “poses new enforcement challenges and difficulties, and has contributed to an erosion of the sales tax base across cities and counties,” it said.

The groups support the Marketplace Fairness Act, which would make it easier for states to collect sales taxes on online purchases. It would apply to retailers with annual sales of more than $1 million. The bill passed the Senate last month but has not been taken up in the House. States would have to simplify their tax codes and give retailers software needed to help collect the tax at no charge, USA Today has reported.

For New York to opt in to the program, its many taxing jurisdictions would have to agree on what’s subject to sales tax, Gannett’s Washington Bureau has reported. Some counties don’t tax clothing and footwear sales less than $110, but most counties and cities do, including Putnam, Rockland and Westchester and the cities of Mount Vernon, New Rochelle, White Plains and Yonkers.

New York could decide to keep its “Amazon tax,” which applies to some e-commerce retailers, including Amazon and Zappos. It doesn’t apply to Overstock.com.

Westchester’s losses are among the top 10 highest among counties nationwide. This is a chart  about those losses in the report:

salestaxloss

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4 Comments

  1. The numbers are a myth, at best. In 2012 there were $225B in online sales. Of that, 83% of purchases were made at WalMart.com/BestBuy.com/Target.com/Sears.com/Amazon.com (collects sales tax in NY) and many other BigBox retailers w online presence. At 7% tax, that leaves $2.6B ‘uncollected’ nationwide, or $15M, not the $91M the article claims.

  2. Martin Lavoy on

    This is no better than propaganda. These numbers deliberately obscure the fact that most of the tax is collected. $225B online retail sales EVEN AT a 10% sale tax rate would be less than $26B. Multiple studies have shown that (1) [as the other commenter notes] most online sales are made by big box retailers and already taxed (83% of them) AND (2) a study by the brooking institution and by george mason university show that the tax would only collect an additional $4-6B, consistent with the uncollected 17% of online retail sales.

    This is Walmart and greedy state government propaganda overstating the “problem”. What an embarrassment.

  3. I live in Larchmont and am a small business owner. This “news story” was planted across the country in hundreds, perhaps thousands of small local news sites.

    Shame on you for re posting this false information without checking the facts or even mentioning the other side.

    This law is part of Walmarts plan to kill the last chance for independent retail.

    If any readers are curious about the truth I just put a post on my blog today.

    http://blog.brickhousesecurity.com/the-internet-tax-issue-a-proposal-and-a-challenge/