For a long time, online sales managed to skate under the radar of states’ sales taxes. But more and more, that is no longer the case. States have become wise to the work-around and are moving to force online retailers to collect taxes.
Illinois is one of the latest states to do so, hoping that the new tax will fill in its budget deficit. It’s understandable that states would want to fill their deficits and that they would want retailers in other places to replace the tax revenue they’re losing when consumers don’t shop locally. But sales taxes generally are considered to be a regressive tax, meaning that it falls harder on poor people than wealthy people. Poor people use more of their income for basic necessities, but since they are taxed at the same rate on those purchases as wealthy people, they feel the pain of that tax more directly and more intensely. So people looking for good deals online are going to find those deals are now a little less helpful.
It’s just another example of governments slowly adapting to new technology and new ways of conducting business. Money and tech always move faster than the governments trying to regulate them.
