Multi-State- States See Surge in Tax Collections From Online Sellers

Sales and use tax collections from e-commerce transactions have become the one silver lining running through the coronavirus cloud darkening state revenue coffers.

The evidence is still anecdotal, but sources watching state revenue numbers told Bloomberg Tax collections from online sellers were at least 25% higher during the early months of the pandemic compared to the same period last year.

The surge is attributed to increases in online shopping due to state shelter-in-place orders and wider compliance with sales tax statutes reflecting the precedent established in the Supreme Court’s South Dakota v. Wayfair ruling. The 2018 ruling cleared the way for states to require remote sellers and online marketplaces to collect and remit taxes from e-commerce transactions.

The surge can also be seen across the 24 states conforming to the Streamlined Sales and Use Tax Agreement, a unique pact harmonizing tax practices for remote sellers. While several states haven’t submitted final first quarter 2020 tax collections data, initial reports from a handful of states reveal revenue increases ranging from 25% to 100% in comparison with 2019 data.

For more information: Bloomberg Tax

Bloomberg Tax
By Michael Bologna
May 12, 2020