Cyber Monday can hurt state's economy - MSNewsNow.com - Jackson, MS

Cyber Monday can hurt state's economy

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By Ashley Conroy - email

JACKSON, MS (WLBT) -- After the Black Friday frenzy some shoppers can't get enough of the great deals. To give shoppers a break, retailers instead offer door buster deals online.

Since Cyber Monday was coined in 2005, more and more shoppers are taking their spending habits to their computer to avoid crowds.

A consumer study by BIGresearch, estimates 106.9 million people will shop online on Cyber Monday compared to 96.5 million last year.     

However, a federal mandate passed by the U.S. Supreme Court in 1992 prohibits retailers located out of state to not collect sales tax revenues for that state.

For Mississippi, this means potentially hundreds of millions of dollars lost in potential revenue to the state's General Fund.

"A remote seller is not required to collect our sales tax unless they have a presence here," State Department of Revenue Spokesperson, Kathy Waterbury said. "Congress will have to pass a law that requires the vendors to collect our sales tax and allow us to require them to collect it."

Waterbury says if Congress passed a law to change this, then the Mississippi Legislature would also have to revise it's current state tax code.

The National Retail Federation reported from a study commissioned by the National Conference of State Legislators that in 2011 an estimated $23 billion dollars in taxes will be lost to states around the nation with $300 million of that from Mississippi.

The State Tax Commission says sales tax is the bread and butter for boosting revenue to the state's general fund.

"Sales tax is our primary tax," Waterbury said. "Sales tax and income tax basically pay most of the bills for us out of the general fund."

For any retailer with a presence in the state like Wal-Mart, Target, or Best Buy, online shopping will generate sales tax back to Mississippi.

Between Black Friday, Cyber Monday, and the rest of the holiday season, Waterbury says the hope is that revenues this year bring in more than last year.

"We had slipping sales tax revenues and were well below estimate, hopefully we will see some growth this year."

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