Get ready for prices to go up on everything you buy online. The Wall Street Journal recently reported that tax breaks for online shoppers might be nearing their end. Internet sales and digital goods might soon be subject to sales tax just like physical goods and physical store sales. This means that customers would be charged sales tax when they purchase an ebook. This could be good news for libraries.
The increase in the price of ebooks will create a higher incentive for people to consider borrowing a book for free from a library. Paying 10 percent more for an ebook might not sound like much but it will definitely cause people to change their behavior. When gas prices go up 10 percent a lot fewer people drive and a lot more people buy hybrids and fuel efficient cars. Ebook sales would definitely be impacted if sales tax is charged on ebooks.
All the people that would have normally bought an ebook would look to other sources to try and fill their desire for a good read. An obvious source would be their local library. People will be more willing to try borrowing an ebook or a print book from a library if they have to pay sales tax on ebooks.
Another benefit for libraries will be the additional tax revenue. States have been facing massive budgeting problems due to the drastic declines in tax revenues as a result of the economic slowdown. Most have had to cut spending to balance their budgets and many have cut library budgets as part of their austerity measures. Charging sales tax on digital content and Internet sales would be an additional source of income for states and might result in some restored library budgets.
Usually no one is happy about prices going up, but in this case libraries could have some things to cheer about. Giving states additional tax revenue and providing added incentive for people to use a library are two reasons why libraries could really benefit from sales tax on ebooks.