Indirect purchases are third party transactions made through an intermediary.
While the groups surveyed made only 9 percent of their total purchases online, over half said they were just starting out with Internet buying. They say rules that Internet retailers, like catalog retailers, need to collect sales tax only if they have a store in the purchaser's jurisdiction are eroding their revenue base and threatening services from schools to ambulances. Shafroth said a November Forrester report analyzing the effect of both retail and B2B online transactions on state budgets had shown B2B sales overtaking retail sales by the end of 2002. A group of about 30 states are working to simplify the country's unwieldy sales tax system, currently administered by a patchwork of some 7,500 different sales tax jurisdictions, to make it easier for businesses to collect the taxes. To date, project officials say, four states have passed legislation allowing them to enter into a common sales tax agreement.