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Study: Ohio Losing Millions As Online Shoppers Avoid Sales Taxes

A new University of Cincinnati study shows Ohio retailers and state and local governments are losing huge amounts of money during the holiday shopping season as more shoppers go online. Researcher Jeff Rexhausen estimates during November and December Ohio retail stores will sell about $940,000,000 in goods and services. "That figure would be $137,000,000 higher if people were paying sales tax wherever they went and some of them made the choice to change where they made the purchases." In other words, Rexhausen says, many consumers are shopping online specifically to avoid payment of sales taxes. Gordon Gough of the Ohio Council of Retail Merchants gives an example. "A consumer who is going to jewelry store, takes a look at what wares they may want to purchase, physically feel the merchandise, and go home and purchase it online for a ten percent discount or greater because of the sales tax." The University of Cincinnati research shows that both the jewelry store and state and local goverment lose money in that transaction, the store loses the sale while the governments lose the sales tax. But, Gough doesn't blame the consumer. "Sure, I mean its a tough market out there, everybody's watching their money and if someone can save ten percent online they may make that sale." Gough says disparity between brick and mortar stores and online retailers with no presence in Ohio is increasing as the percentage of online shoppers keeps growing. The U-C research was done for the Ohio Council of Retail Merchants.