Study Finds Wisconsin Is Missing Less From Internet Sales Than Previously Thought

A new study by the Wisconsin Taxpayers Alliance shows Wisconsin isn’t losing as much sales tax revenue through internet sales as first thought.

The group’s study shows Wisconsin is only losing out on $25 million a year from sales taxes on online purchases.

Todd Berry is the group’s president. He says $25 million is still a lot of money, but the disparity isn’t as bad as previous estimates have shown.

“The estimates would range, last year, between $50 million, $100 million, $150 million,” Berry said. “So it’s always been a little bit of a guessing game. All we’re saying is when we started looking at individual firms that were dominating the internet sales business, a lot of them would have to pay Wisconsin sales tax.”

That’s because companies that have a physical presence in the state have to collect the 5 or 5.5 percent sales tax. Berry says stores like WalMart, Sears, and Best Buy are all e-tailers. Since they have stores here, customers are charged the tax.

He also says the country’s, if not the world’s, largest online seller now has a physical presence in Wisconsin: Amazon.

“Amazon is locating a distribution center, I would hypothesize, in Kenosha in order to get access to the large metro Chicago market without having to pay higher Illinois sales tax,” he said.

Berry says the $25 million in uncollected state sales taxes comes from small retailers and from people-to-people sales where buyer and seller don’t realize they have an un-met tax obligation.