stylistic:style_transfer, stylistic:tone, information:extraction
Effect of electronic commerce

Electronic commerce business can also be affected by consumption taxes. It can be separated into four categories: retail, intermediaries, business-to-business and media (Goldfarb 2008). These categories were affected varying degrees. The intermediaries were affected by the retail sales tax since it provides platforms for transitions between different parties (such as the Amazon marketplace). Business-to-Business transactions will be placed in different circumstances by whether the case will be taxed in the US. Electronic commerce goods are usually not taxed the same especially across the stats in the US. Different states have their own sales tax regulations, for example, some states use their standard sales taxes law for the digital goods, and some of the states have specific laws for them. It is difficult to enforce the taxes on electronic commerce especially for digital goods that trade across different countries.

The effect that a sales tax has on consumer and producer behavior is rather large. The price elasticity of demand for online products is high, meaning that consumers are price sensitive and their demand will significantly change with small changes in price. This means that the tax burden lies primarily with the producer. To avoid altering demand, the producer will either avoid the tax if possible by relocating their fulfillment centers to areas without a high sales tax or they will internalize the cost of the sales tax by charging consumers the same price but paying for the tax from their profits.