Millions shop Cyber Monday as local governments tally tax losses | News
CHARLOTTE, NC (WBTV)- The holiday season is traditionally a time when retailers can make up to 40% of their annual revenue.
This year, millions of people logged on to their smart device and finished up their holiday shopping with the click of the mouse on Cyber Monday.
A survey found more retailers than ever before planned to offer Cyber Monday deals – aiming for the 72 million Americans who said they would holiday shop from the office this year.
But while shoppers are tallying up their "wins", the State of North Carolina – along with other states and municipalities – could be the day's biggest losers.
It's all due to sales tax.
"There are going to be some retailers who are charging sales tax...and some who are not," said Beth Stevenson with North Carolina's Dept. of Revenue.
Currently, retailers that operate only in cyberspace are not required to charge sales tax on purchases.
While some shoppers rejoice at the apparent tax break, the state of North Carolina says, "Not so fast."
Stevenson says North Carolinians who make online purchases of products including music, e-books, and even ring tones without paying state sales tax are supposed to list those purchases on their state tax returns in April and pay up.
The problem is, many residents aren't aware of the requirement and others simply ignore it.
"For 2012 we could lose approximately $214 million in revenue from online e-commerce transactions," said Stevenson.
Rebecca Thompson spent part of Cyber Monday shopping online for deals. She says she always records unpaid taxes from online purchases.
"I do, because I've heard too many horror stories of being audited and little things like that coming up," said Thompson.
Some states and even the federal government are currently working to require all online retailers to charge sales tax. In the meantime, some will pay and others may dodge the taxes temporarily.
Thompson says she'll continue to pay her share of state sales tax to keep from dealing with a potential penalty later.
Of course, millions of other shoppers won't report their unpaid sales tax – and that means the losses tally up for local governments.
Meanwhile, how well retailers fare on Cyber Monday offers insight into the evolving shopping habits of Americans.
Analysts expect the 2012 Cyber Monday to be the biggest online shopping day of the year, for the third year in a row.
According to research firm comScore, Americans are expected to spend $1.5 billion, up 20% from last year on Cyber Monday, as retailers have ramped up their deals to get shoppers to click on their websites.
Many shoppers say not only do they enjoy skipping the chaos of traditional box stores, but they like easy access to online reviews and price comparisons.
But there's a catch.
Smartphones, tablets, and computers at home and work means more shoppers are able to browse anytime – not just on Cyber Monday.
For the holiday season-to-date, comScore found that $13.7 billion has been spent online – prior to Cyber Monday - marking a 16% increase over last year.
The research firm predicts that online sales will surpass 10% of total retail spending this holiday season. The National Retail Federation estimates that overall retail sales in November and December will be up 4.1 percent this year to $586.1 billion.
"Of all the benchmark spending days, Thanksgiving is growing at the fastest rate, up 128 percent over the last five years," said Andrew Lipsman, a spokesman with comScore.
Online sales on Thanksgiving Day 2012 – traditionally not a popular day for online shopping – rose 32% over 2011, according to comScore.
Online sales on Black Friday 2012 were also up 26% from 2011 – marking the first time Black Friday online sales surpassed $1 billion.
When shopping online, there are many things to consider.
The Better Business Bureau offered several pieces of advice ahead of Cyber Monday. You can read what the BBB has to say about shipping and handling fees here, advice on preventing ID theft online here, and more online shopping advice here.
Copyright 2012 WBTV, The Associated Press and CNN. All rights reserved.
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