Today is Cyber Monday and Mississippians are expected to join millions of people shopping online for the holidays. But those purchases may not boost the state's sales tax revenue.
Mississippi could be losing millions in sales tax revenue because of a 1992 U.S. Supreme Court ruling. The decision requires only online retailers with a store or warehouse in a state collect the 7 percent sales tax. Kathy Waterbury with the Mississippi Department of Revenue says thinks tanks have tried to figure out how much states are losing.
"The numbers are huge but you don't know what goes into that and nobody has come up with the same number so it's really hard to pick one, who you think has got the best information. Retailers who are remote from the state don't report to us," said Waterbury.
Bob Neal is a Senior Economist with the University Research Center. In 2013, he estimated the amount lost in sales tax from internet and remote sales for a study by the Secretary of State's Office. Neal looked at purchases made by consumers and businesses. He says he came up with a high and a low estimate.
"At that time the state was losing about $72,179,000 in sales and use taxes. That was the high estimate," said Neal.
The low estimate was $62 million. But that was four years ago. This year Amazon agreed to start collecting sales tax. Kathy Waterbury says 30 of the 50 largest e-retailers are also collecting sales tax. Mississippi passed a law in 2009 to collect taxes from online sales. But it can't be enforced because of the high court's ruling. Mississippi's attorney general has joined 10 other states in asking the U.S. Supreme Court to hear the case involving a Colorado law. It would require retailers without a physical presence in that state collect sales tax.
