Bill Delahunt: “Last year, in 1999, State and local governments lost $525 million in anticipated sales tax revenues on e-commerce or…”

“Last year, in 1999, State and local governments lost $525 million in anticipated sales tax revenues on e-commerce or so-called Internet sales. Researchers from the University of Tennessee estimate that on-line sales will grow to $200 billion by 2003. Unless there is a system that is in place that enables the States and local governments to require out of State merchants to collect taxes on their sales to in-State residents, they will lose more than $20 billion annually by 2003. This chart on my right lists all 50 States in their projected sales tax revenue losses for the single year of 2003. Some examples are instructive. Florida will lose $1.4 billion in sales tax revenue. Texas will lose more than $1.7 billion in revenue. It is important to note, by the way, that Florida relies upon the sales tax for 57 percent of its total revenue, and Texas relies upon the sales tax for 51 percent of its total revenue. It is easy to imagine how these kinds of losses affect a State or local government's ability to provide for basic services such as police and fire protection or a viable educational system. They will either be compelled to cut back these services or more likely raise income taxes and/or property taxes. No way will this underlying bill cut taxes. It is important to be clear about that. At best, it will only shift them.”