Consumers who are price-sensitive enough to be looking at the tax added to their online shopping carts will also be looking for this other add-on...and potentially be turning away because of it.
With competition growing ever more intense in the online marketplace, then, "It is true that you have to think harder about moving towards free shipping and handling," says Anderson.
Shoes Don't Tell the Whole Story
A $2.70 tax is, perhaps, a small extra price to pay for some spiffy new kicks. But a consumer about to buy a $3,000 TV on Best Buy's website may see $180 extra in sales tax, and decide to buy from an online-only site instead. And because manufacturers often instill minimum retail prices for durable goods, says Anderson, big box stores wouldn't be able to drop prices further in order to lure customers away.
"The incentive to buy a $3,000 TV from Amazon when you don't pay tax goes way down now, because you pay tax on it but you're also going to pay tax at Best Buy," says Anderson.
In other words, sites that sell clothing and shoes may have much less reason to fear a new sales tax than sites that hawk home theaters.