Pennsylvania is missing out on close to 2,800 jobs as a result of letting online retailers like and that sell merchandise in the state without collecting sales tax, a study conducted by researchers at Carnegie Mellon University shows.

The new study was noted by the Alliance for Mainstreet Fairness, a political action group composed of brick and mortar retailers like Wal-Mart, Best Buy and Target that are in favor of online merchants collecting sales.  Meanwhile, a total of between $4.044 billion and $6.529 billion in online internet sales are currently not being taxed by the state, while $400 million per year goes uncollected in sales tax as a result of the state’s failure to impose tax rules on online retailers.

“Simply by requiring online-only retailers to collect and remit sales taxes that are due on purchases at point of sale, thousands of Pennsylvanians could be at work in brick-and-mortar stores in our communities” said Dan Hayward, a spokesman for the Alliance, in a statement. “It’s only fair that they should collect and remit like their Pennsylvania-based competition is required to do. By achieving this objective, we can create thousands of needed jobs all across the Commonwealth.”

According to the report, which was released this past April, Pennsylvania will miss out on between $254 million to $410 million in uncollected online sales taxes in 2012.

The battle to collect online sales tax has been an ongoing one but more recently picked up steam after Illinois governor Pat Quinn signed into law legislation imposing what’s been called an “Amazon tax” on online retailers in March. While the online sales tax fight for the most part has played out on a state level, Illinois Senator Dick Durbin (D-IL) indicated this past April that he would introduce a Mainstreet Fairness Act to Congress. If such a bill passed, then it would mandate online retailers doing business in any U.S. state collect online sales tax from their affiliates.

Read: Shopping with Could Make You More Susceptible to an Audit

This Friday, Texas legislators broke with the decision rendered by the state’s governor Rick Perry last week and refused to kill legislative provisions that would have required online vendors to impose online sales taxes, according to the American-Statesman.

Read: Texas Says ‘No’ To Internet Sales Tax

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  • EmJay

    I really don’t understand this – I pay PA sales tax on every book I purchase from Amazon.

  • Fred

    Well That is not entirely true as people will still order online from Amazon if for no other reason as saving time, gas, and having to deal with the crowds at Walmart.  The reason behind this movement against Amazon is greed by the big box stores

  • Nate Winget

    Lame article….please, somebody explain supply side economics to Miss Okomo.  Did anybody catch the last paragraph?  Wait…isn’t Texas the state that has created the most jobs in the union over the past 3 years?  Hmm….I wonder how their tax policy relates to their amazing ability to create jobs??????

  • SW

    Please stop blaming Amazon, they are in support of fixing the problem. Why should Amazon be the only one collecting and remitting multijurisdictional sales taxes? The technology exists today for all businesses to calculate, collect and remit sales tax due in any jurisdiction in any state.

  • Hello,

    I just wanted to thank everyone for taking the time to leave comments. That being said, I don’t personally share the beliefs expressed in this particular piece, and was merely attempting to convey information from a study.

    The online sales tax debate is one that will likely go on for years, and it was simply my intent to highlight this particular side of the debate. I regret that the headline was so charged, and in the future I will make it a point to choose my words more carefully.

  • SW

    Thank you Carolyn,

    The other important fact is simply that sales and use tax are do the jurisdiction where the consumer resides unless specifically and legally exempt. In other words, If I purchased goods online where the retailer failed to collect and remit sales tax on my behalf, I would still be legally obligated to remit the tax on my individual state tax return. The problem truly falls upon individual tax payers themselves. If the tax that pays for education, health care, services, public libraries and infrastructure continue not be remitted as legally required I assure you that the alternatives are far worse. For instance the state of CT just yesterday enacted the largest tax increase in their history. The tax on alcohol went up 20% alone as well as the sales tax rates on purchases over $1000 not to mention a list of other increases. So while states are increasing rates to today to make up for budget shortfalls, the online aspect of tax collection will become a reality enforcing higher rates resulting from unwillingness to ethically participate today.