The Impact of Sales Tax on E-Commerce. Better Insights. Smarter Marketing.
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1 The Impact of Sales Tax on E-Commerce Better Insights. Smarter Marketing. Provided August 5, 2016
2 Half of online buyers pay sales tax Did you pay sales tax on the purchase you just made from this retailer? I don t know 21% No 28% Yes 51% 2 of those who did not pay sales tax live in a state where sales tax is never charged on this type of purchase. Bizrate Insights Question: Did you pay sales tax on the purchase you just made from [retailer name]? n=6,216 August
3 Overall, sales tax not a leading consideration in choosing from which retailer to purchase Only 29% of online buyers find sales tax important in 2016, down from 3 in How important was sales tax (or lack thereof) in your decision to purchase from this retailer today? 3 30% 29% in % in % 2 23% 22% 8% in % in % 11% 8% 0% It was important as a factor of total cost It was important on its own It was considered, but not of high importance and/or not important to me because all retailers I looked at charged sales tax because I had to purchase from this particular retailer 3 in 2011 and 2013 versus 29% in 2016 Bizrate Insights Question: How important was sales tax (or the lack thereof) in your decision to purchase from [retailer name] today? n=6,184 August
4 However buyers are polarized over importance Nearly equally sized groups find tax important with respect to total cost versus finding it so unimportant that they don t even recall if they just paid it. How important was sales tax (or the lack thereof) in your decision to purchase from this retailer today? TOTAL Paid sales tax Did not pay sales tax Don't know if they paid sales tax 4 40% 41% 3 30% 2 23% 18% 6% 6% 9% 4% 2 22% 29% 2 26% 11% 18% 2% 8% 13% 0% It was important as a factor of total cost It was important on its own It was considered, but not of high importance and/or not important to me because all retailers I looked at charged sales tax because I had to purchase from this particular retailer Bizrate Insights Question: How important was sales tax (or the lack thereof) in your decision to purchase from [retailer name] today? n=6,184 August
5 Sales tax importance may change by purchase Total order cost is the biggest factor than may increase importance Does the importance of sales tax change depending on the purchase you are making online? Yes, I focus on it more as the cost of my order increases 24% Yes, it is important if I have a choice to buy online vs. locally 1 Yes, it is important when I have a choice of different online retailers No, it is always important 9% No, it is generally not something I consider Bizrate Insights Question: Does the importance of sales tax change depending on the purchase you are making online? n=6,156 August
6 The No Tax group may look beyond cost Reasons beyond cost may become important for future hypothetical purchases Does the importance of sales tax change depending on the purchase you are making online? Total Paid sales tax Did not pay sales tax Don't know if paid sales tax Yes, I focus on it more as the cost of my order increases 24% 23% 29% Yes, it is important if I have a choice to buy online vs. locally Yes, it is important when I have a choice of different online retailers 1 14% 1 16% 21% No, it is always important 9% No, it is generally not something I consider 29% 42% 46% Bizrate Insights Question: Does the importance of sales tax change depending on the purchase you are making online? n=6,156 August
7 Abandonment consideration is down Fewer buyers considered abandoning their purchase due to sales tax. Did you consider not buying from this retailer today due to the sales tax? Segment = those who paid sales tax % 80% 70% % 50% 40% 30% 8% 12% 14% 3% 3% 0% Yes - but the total cost was still lower than other sites Yes - but factors other than cost were more important in my decision No I don t recall Bizrate Insights Question: Did you consider not buying from [retailer name] today due to the sales tax? Segment = those who paid sales tax. n=3,153 August 2016, n=10,340 April- May
8 42% wouldn t change purchase if charged tax While that may change for higher value shopping carts, the overall trend is down If the retailer from which you just purchased had charged sales tax on today s purchase, then would you have purchased from a different retailer? Segment = those who did not pay sales tax % 3 30% 42% 36% 3 36% % 18% 8% 0% Yes I would have chosen a different retailer who did not charge sales tax Yes I would have bought from a local store No my choice in retailer depended on other factors Maybe it depends because total cost is my primary consideration Bizrate Insights Question: If [retailer name] had charged you sales tax on today s purchase, then would you have purchased from a different retailer? Segment = those who did not pay sales tax. n=1,702 August 2016, n=2,650 May 2013, n=8,871 April-May
9 About this Study The Bizrate Insights Sales Tax Studies were conducted via the Bizrate Insights survey platform and offered to online buyers immediately after purchasing from the Bizrate Insights Network of over 4,500 e-commerce retailers in the US and Canada. Data from each Sales Tax Study was collected from 6,216 online buyers from August 1-4, 2016, 10,086 online buyers from May 1 9, 2013, and from 34,022 online buyers from April 21 May 31, For 18 years, Bizrate Insights has helped retailers listen to their customers in a way that is fast and measurable, resulting in insights, action, conversation, and customer loyalty. The Bizrate Insights customer feedback and ratings platform allows retailers to collect seller ratings directly from verified customers immediately posttransaction. Standard ratings are published across the leading comparison shopping site, Bizrate.com, and syndicated across the web s largest search engines, such as Google and Bing, to help drive conversion and traffic. Collecting over 25 million surveys annually, Bizrate Insights is one of the largest sources of consumergenerated review content in the world, delivering actionable insights and valuable shopper data to key decision makers in e-commerce. Bizrate Insights is used by Internet Retailer Top 500 retailers, as well as smaller boutiques. Visit to learn more about our FREE and paid buyer and site abandonment survey and reporting products. 8
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