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Will Tax-Free Online Shopping End Soon?

POSTED: Tuesday, January 13, 2009
UPDATED: 8:12 am EST January 13, 2009

A failing economy and shrinking state budgets have state governments, including Florida, considering doing away with tax-free shopping on the Internet.

The debate isn't new, but the idea has resurfaced as a result of dire budget constraints. Florida lawmakers are grappling with a $1.2 billion budget deficit.

While state services are being reduced and spending for public schools in the state is being slashed, online purchases are booming. According to Forrester Research, consumers spent $204 billion online in 2008 and $175 billion in 2007. But states rarely see tax dollars from those sales.

“There is no question that there is some revenue being left on the table by the states," said University of Miami law professor Michael Froomkin.

Froomkin, who teaches cyberlaw at UM, believes the technology is in place for states to recoup cash.

Some experts believe that before the end of 2009, Congress could repeal the current law that blocks Internet taxes.
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