The future of cyber sales
The news was intense on Cyber Monday, not so much about what people bought or how much they spent, but how they may be buying items in the future and who will benefit in the future.
For one thing, it looks increasingly likely that states and local governments will be able to collect sales taxes from online purchases, even if the retailer has no facilities in the state.
As we and many others have argued, such sales are an important source of revenue for state and local governments, and it’s a matter of fairness for local retailers who have a tough enough time competing with online businesses. The online stores shouldn’t have a “no sales tax” advantage, as well.
The eye-popping techno news was from Jeff Bezos, the CEO of Amazon. On “60 Minutes” Sunday night, he said that Amazon is developing a fleet of drone delivery vehicles that it hopes to have ready for service in four or five years. When it does, he said, many Amazon customers will be able to receive delivery of their purchases within 30 minutes.
That’s right, in less time than it usually takes to have a pizza delivered to your home, you may soon be able buy and receive a book, DVD, pair of shoes or computer accessory.
There are, however, a few obstacles that must be overcome. One is that the FAA flight rules don’t currently allow those sorts of drone flights, although new rules are being considered.
Additionally, the Amazon drones currently can only operate in a 5-mile radius, which means deliveries will have to be close to the large Amazon warehouses in major urban areas. This George Jetson-like future may be a few more years off for those of us living in the hinterlands.
An event that will have a more immediate effect on cyber shopping occurred Monday when the U.S. Supreme Court declined to hear a case from New York, regarding the collection of state sales taxes from online sales.
In 2008, New York passed a law requiring the state to collect sales taxes for online sales when the purchasers live in the state, even if the retailer is out of state. The New York Supreme Court upheld the law, but Amazon and Overstock.com petitioned the nation’s high court to review that decision.
Sales taxes for online sales are required in many states, including Colorado, but it has generally been up to the customer to pay them, and that usually doesn’t occur.
The Supreme Court’s nonaction opens the door for states to become more aggressive in pushing online retailers to collect sales taxes. Meanwhile, Congress has also been moving in that direction.
Last May, the Senate passed the Marketplace Fairness Act, which would require businesses that have more than $1 million in revenue to collect sales taxes from customers in all states and from any localities that charge sales taxes. The measure has stalled in the House.
Still, the Supreme Court action will help states in collecting those taxes, and level the playing field a little for bricks-and-mortar businesses. That’s important for local businesses and the economies that depend on them, regardless of whether the drone-dominated future envisioned by Bezos ever materializes.