A new study by the University of Cincinnati shows businesses in Ohio are losing out on hundreds of millions of dollars because internet companies are not collecting tax dollars at the point of sale. Jeff Rexhausen of University of Cincinnati's Economics Center says the report also shows the state is also losing out on tax revenue.
Rexhausen says, "This collection gap will result in a tax revenue shortfall within Ohio of more than two hundred million dollars this year and a total of more than 1.1 billion dollars for the six year period of 2007 through 2012 – and this will likely continue to increase over time. Our second finding is that where e-commerce occurs in order to avoid paying sales tax, it has a negative effect on store based, retail sellers (or store retailers) – and this loss of business for store retailers is estimated at more than 600 million dollars in lost business in Ohio this year."
The report also shows Ohio could recapture eleven thousand jobs if the internet sales tax loophole is closed. The Ohio Council of Retail Merchants and other groups that represent small businesses in Ohio plan to lobby congress to require tax be collected when an internet sale is transacted.