SCOTUS tax ruling expected to help small businesses

Published 1:01 am Saturday, June 23, 2018

On Thursday, the Supreme Court overturned a 1992 ruling that had made it very difficult for states to require online retailers to charge their customers sales taxes. Now that the law is overturned, Ward and Co. owner Mike Ward said that the playing field is more level for small business.

“It’s going to make a more level playing field for sure,” Ward said. “One of the main components that makes people shop online is that they don’t have to pay that sales tax.”

It is estimated that the ruling will allow state and local governments to collect anywhere from an additional $8 billion to as much as $23 billion a year in additional taxes.

Ward said that people are more likely to buy from an online store because it can save as much as 10 percent if the retailer doesn’t charge taxes.

“I mean, if they come in my store and want to buy some sunglasses that cost $200, they will get a 10 percent discount because the online stores don’t charge our sales tax,” Ward said. “So they would wait a couple days because of shipping and get cheaper sunglasses.”

Ward said that in 1992, the Supreme Court tried to overturn the ruling, but failed. Since the internet is much more prevalent now, the ruling is obsolete.

“Back then, people didn’t really use the internet much to shop,” Ward said. “But now it is 98 percent of shopping.”

Amazon had already begun charging sales tax, but thousands of online retailers, notably, do not.

“I really hope this helps mom and pop stores,” Ward said. “Or at least just level the playing field.

On Thursday, Gov. Kay Ivey released the following statement regarding the U.S. Supreme Court’s ruling:

“Technology and the advent of e-commerce has drastically changed the retail landscape and the states’ ability to collect sales taxes,” Ivey said. “The Supreme Court’s ruling related to online sales taxes is a common-sense approach that modernizes existing limitations on the taxation of e-commerce sales and will facilitate collections in our global, technology driven economy. The change effected by the court’s decision will promote parity between our state’s brick and mortar businesses and competing out-of-state sellers.”

Ward said that some customers even come into his store just to try on North Face jackets and then buy the same jacket online.

“It goes back to that 10 percent chunk of money that they will get taken off when they go online,” Ward said. “It is just one of those things that the court needed to fix and I really hope it helps.”