The Census Bureau released new retail figures last week, including figures for e-commerce sales in the first quarter of 2011.
We did a little math to figure out, based on those first-quarter figures, how much we can expect in e-commerce sales for this entire year. We averaged the ratios of first-quarter e-commerce sales to total e-commerce sales for 2009 and 2010, which gave us a figure of 4.24—in other words, the total e-commerce sales for the past two years have averaged about 4.24 times as much as the first-quarter sales.
|Previous Two Years E-Commerce Retail Sales (in Millions)|
|2009 Q1||2009 FYE||’09 FYE/Q1||2010 Q1||2010 FYE||’10 FYE/Q1||Avg. Ratio|
Using that ratio for 2011, we multiplied the first quarter e-commerce sales figure of $46 billion by 4.24 to get just over $195 billion. We should point out this figure does not include sales from online auctions, mail-order catalogs, telephone orders, or TV shopping networks.
Now for the most interesting part: how much sales tax (or use tax) due will actually be collected/remitted?
At the current average sales tax rate of 6.85% percent, the total sales tax due on $195 billion is approximately $13.5 billion. However, according to California’s Board of Equalization, typically only four-tenths of one percent (0.04%) of the tax due on e-commerce sales is collected. Which means that (drum roll, please). . .
Although about $13.5 billion will be due, the states can expect only $53 million in revenue, unless Congress takes action by enacting the Main Street Fairness Act. With our states in such dire fiscal condition, we hope Congress will allow states to simply collect the tax that is due, instead of raising taxes.