Lagging state sales tax collections could spell budget trouble. Todd Berry with the Wisconsin Taxpayers Alliance says sales tax collections seem "sort of anemic," and there may be a couple reasons why. One, the flat housing market may be depressing retail sales. Two, on-line retailing appears to be hampering sales tax collections.
In fact, Berry says a University of Tennessee study projected increased Internet sales would result in states losing out on sales tax revenues. That seems to be happening, and not at a good time for Wisconsin: last year, state sales tax collections were up just eight tenths of a percent. Berry says it could be a problem, if collections remain flat over the course of the current two year budget cycle.