Companies in the U.S. transportation industry have seen a record value of e-commerce shipments. Revenue from e-shipments surged to $706 billion, according to the latest annual data, an increase of 7% compared to the previous year.
The findings bring into focus an industry which is increasingly turning to digital transactions and fulfillment. E-shipments now account for 80.4% of total sales value in the industry. Trends are predicted to continue as part of a sustained transition.
The research, collated by State and Local Tax specialists at Source Advisors, analyzes up to 5 years of manufacturing industry e-commerce revenue in the USA using the latest available data* to highlight the sectors which are capitalizing on e-commerce to fuel growth.
Analyzing state level growth in transport equipment manufacturing, Indiana saw the greatest real term increase in revenue from all activity — a $12 billion surge. This was an increase of 15% compared to the previous year. Next highest was Texas with a $9 billion increase in revenue, 16% higher than the previous year, followed by Oregon with a $3.9 billion increase, which represents a 9% year on year increase.
Tax experts warn companies to be aware of increased liability from local tax which follows ecommerce expansion. A common pitfall when selling products online across multiple states.
“The benefits in expanding e-commerce operations is clear, and revenue taken from online operations is only likely to increase further,” said Chris Vignone, managing director at Source Advisors. “Companies that are expanding their market presence across the USA must be acutely aware of how each sale affects their tax liabilities.”
“Selling products in multiple states means navigating a complex web of local tax regulations, where each state’s rules determine tax obligations. This can lead to significant tax burdens if not managed properly. Companies must invest in robust tax management systems to avoid unnecessary overspending on taxes.”
About Source Advisors:
Source Advisors is a specialty tax consulting firm comprised of CPAs, attorneys, engineers, and technology experts, many of whom have Big Four experience. These professionals primarily practice in the legislation that governs these incentives and assist CPA firms and companies to navigate the laws that continue to evolve and change. For more than 40 years, the firm has assisted manufacturers and technology companies in maximizing government-sponsored tax credits, deductions, and incentives.
Source Advisors provides support and guidance to its clients relative to establishing systems for tracking expenditures and activities. It also prepares technical reports, financial workpapers, and other documentation in support of the client’s tax positions. Additionally, Source Advisors assists clients in the event that their tax positions are audited by federal or state government agencies.
Source:
sourceadvisors.com/state-and-local-tax
Data notes:
- Source — Annual Survey of Manufactures: E-Commerce Statistics for the U.S. — gov/programs-surveys/asm.html
- E-commerce shipments (e-shipments) are online orders accepted for manufactured products from customers, including shipments to other domestic establishments of the same company for further manufacture, assembly or fabrication where price and terms of sale are negotiated over the Internet, Extranet, Electronic Data Interchange (EDI) network, e-mail, or other online system. Payment may or may not be made online.
