Study: Ohio could recoup $200M in sales tax

By Marc Kovac | October 20, 2011 at 12:00a.m.

COLUMBUS

The state could recoup more than $200 million in annual sales-tax revenues and thousands of jobs in the retail industry if Congress moves to require states to collect and remit the taxes on online purchases.

That’s according to a study released by the University of Cincinnati this week on behalf of a retail-merchants group that is pushing for the change.

“This issue is paramount to Ohio’s economy,” Gordon Gough, executive vice president of the Ohio Council of Retail Merchants, said during a press conference in Columbus on Tuesday.

“Ohio is losing jobs and revenue because of an online sales-tax loophole in federal law [that] allows online-only retailers to avoid collecting sales tax at the point of the sale while brick-and-mortar stores [and] small businesses that are here today do every day.”

Legislation introduced in the U.S. House of Representatives would give states the ability to collect sales taxes for online purchases.

Ohio consumers who make online purchases already are supposed to pay sales tax, but many do not.

According to the study, though more than 60 percent of households in the state made at least one purchase from an online seller last year, less than 1 percent of Ohio income- tax returns included sales tax payments on Internet sales, according to the study.

“Given the difficult economic circumstances affecting Ohio’s retail businesses and its state and local governments, finding a way to bring fairness to the online sales-tax process would be a huge economic boon to the state,” said Jeff Rexhausen, associate director of research at the University of Cincinnati’s Economics Center, which produced the study.