Nearly two-thirds of online buyers said they would make fewer purchases from Internet merchants if they had to pay a sales tax, according to a Flash Survey(TM) conducted as part of a partnership between BizRate.com, the Internet's leading e-commerce rating site and marketing research firm, and the Association for Interactive Media (AIM), a leading voice for e-commerce and online activity.
More than 25,000 online buyers participated in the latest point-of-sale survey designed specifically to gauge consumer buying behavior and awareness surrounding the controversial Internet sales tax issue. Conducted in mid-March, the study was the fourth in a series since June 1999.
The latest findings will be introduced today at a meeting of the Advisory Commission on Electronic Commerce (ACEC) in Dallas. Previous survey results have also been a part of ACEC deliberations.
"There's no question the tax issue will impact the future of e-commerce,'' said Chuck Davis, president and CEO of BizRate.com. ``Our real-time data delivers consumer insights and crucial information to legislators and the industry as they deliberate the issue of e-commerce taxation.''
Findings from the Flash Survey series have consistently shown that age, gender and income would also be factors in online buyer behavior if a sales tax were instituted for Internet purchases. Relevant findings from the latest survey include:
The "fewer purchases''
finding has ranged from a low of 59 percent to a high of 75 percent
over the series of surveys.
More than 80 percent of online buyers said that products downloaded
over the Internet (e.g. books and music) should not be subject
to a sales tax.
More men (65 percent) than women (59 percent) said they would
make fewer online purchases if charged a sales tax.
More women online buyers (57 percent) than men online buyers (51
percent) said they would have made their current purchase in spite
of a sales tax.
More experienced Internet buyers (64 percent) than first-time
Internet buyers (53 percent) said they would make fewer online
purchases if a sales tax were imposed.
Concerning the current state of tax systems, and Internet taxes
specifically, survey findings showed that:
Twenty percent of online buyers reported paying a sales tax on
recent Internet purchases. This represents a steady increase in
the number of online buyers paying sales tax charges since the
first BizRate.com/AIM survey in June 1999. At that time, 10 percent
of online buyers reported paying an online sales tax.
Approximately two-thirds of online buyers said that current state
and local tax systems should be simplified.
More men (65 percent) than women (57 percent) favor simplified
local and state tax systems.
Online buyers with higher incomes led lower income shoppers significantly
in advocating simplified state and local tax systems.
Experienced buyers (62 percent) led first-time buyers (55 percent)
in favoring simplified state and local tax systems.
"The BizRate.com data clearly shows that consumers are tax
conscious and are turning to lawmakers to simplify the current
sales tax system,'' said Ben Isaccson, executive director for
AIM.
"With a new millennium upon us, the time is now for the U.S.
states and localities to simplify their systems and remove the
burdens e-commerce merchants currently face.''
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