Carnegie Mellon University
May 04, 2011

News Brief: Study Says PA Losing Millions

A new economic study released Tuesday and compiled by Carnegie Mellon University Professor Robert Strauss shows that Pennsylvania could be collecting between $246-$398 million in additional revenue per year by requiring online-only retailers without a physical presence in Pennsylvania, such as, to collect and remit sales taxes for Internet transactions.

"Pennsylvania is missing out on several hundreds of millions of dollars each year," said Strauss, professor of economics and public policy at Heinz College. "If all Internet retailers were required to collect and remit sales taxes, it would increase tax receipts to Pennsylvania and increase sales at in-state stores."

While collecting sales tax from online-only retailers would provide Pennsylvania's budget with a needed influx of revenue, the study reveals that the state's small businesses and job market would also benefit. It notes that if the state's brick-and-mortar stores had a level playing field with their online competition, Pennsylvania businesses could add between 1,530 to 2,766 new jobs.

The study was funded by the Pennsylvania Alliance for Main Street Fairness, a coalition of hundreds of Main Street businesses in the state committed to educating private citizens, small businesses and elected officials about common-sense updates that can be made to the tax system.

The economic study can be accessed here:

Ken Walters