By most indications, e-commerce this year will experience record Christmas sales.

• According to Jupiter Communications, 1999 holiday online sales are expected to reach $6 billion — $5 billion on products and $1 billion on travel. That's double the $3.1 billion spent in November and December last year.
• A survey by Harris Interactive found that online shoppers plan to spend $9.5 billion during the holiday season.

• Americans would have to pay, if all sales were taxed, between $300 million (Jupiter Communications) and $475 million (Harris Interactive) more in taxes this holiday season.
• Since many couldn't afford the additional 5%, they would simply reduce the amount they purchased, lowering total sales.

State sales taxes range from a low of 3% (Colorado) to a high of 7% (Rhode Island and Mississippi). Five states have no state sales tax. In addition, many local communities impose a local sales tax on top of the state's.

Moreover, a recent Ernst & Young analysis by Robert J. Cline and Thomas S. Neubig of retailer compliance costs for collecting the sales tax found that small businesses had unacceptably high costs. Companies with high-volume sales spend about 1% of the sales tax collected on compliance costs, whereas small, in-state retailers can spend up to 7%.

Of course, these costs are generally passed on to consumers as the cost of doing business. Thus, if state sales taxes were collected, some online shoppers would be spending even more — or else they would try to purchase the product or service from a company that resided in a state with low or no sales tax.

Fortunately, federal law has imposed a moratorium on new Internet taxes, which means online shoppers are safe from federal, state and local tax collectors this season. However, if Internet tax proponents have their way, next Christmas taxpayers will be "open season."