Cyber Monday Sales Day Includes Tax-Free Purchases

Some Businesses Not Pleased With 'Sales Inequality'

Tomorrow's Cyber Monday is expected to be the biggest online shopping day of the year, and many online retailers are not requiring sales tax.

Although lack of a sales tax is sure to lure in customers, many critics argue that it is unfair. According to researchers at the University of Tennessee, shirking responsibility on sales tax costs states $10 billion in 2010.

Because online retailers are not physically present in a state, such as their counterpart technological mega-stores and mom-n-pops, they are not technically required to pay state sales tax.

One online retailer under fire for taking advantage of this tax loophole is Amazon. In-store companies, from mega-retailers to small independent owners, protest this as sales inequality.

"If we don’t close the loophole now, it will continue to get bigger," Neal Olson, Washington director of the National Conference of State Legislatures told the Indy Star.

Current legal pushing could force online companies to implement sales tax. Online retailers have offered an alternative, called the Marketplace Fairness Act, which enables power to individual states to enforce tax collection under existing State Law as long as they follow the Streamlined Sales and Use Tax Agreement.

 Although customers will be happy to avoid sales tax with their Cyber Monday purchases, they also run the risk of getting scammed online.

Faux websites and computer hackers have the ability to view credit card information online, and therefore with just one click a checking account could be tapped or an identity stolen.

"Most people don't think twice about getting [protection] on their computer these days. Get it on your smart phone and tablet as well," said Jennifer Jolly of CBS's "The Early Show."

Cyber Monday, the online version of annual Black Friday, includes online retailers offering discounted prices to jumpstart holiday revenue to reach the year's remaining quotas and clear out old merchandise for new arrivals.

According to's eHoliday survey, eight out of ten online retailers will participate this Cyber Monday sales.