SUPREME COURT DECIDING INTERNET SALES TAX RULES
The U.S. Supreme Court could help boost Alabama sales tax revenues by $200 million a year, but it all depends on how the nation’s highest court rules on a case in South Dakota.
The case, South Dakota vs. Wayfair, could change internet commerce as we know it. At the moment, companies based online must collect sales tax for goods only if the company has a physical presence in the state. That decision was made in 1992, when the internet was still in its infancy.
Brick-and-mortar businesses have complained they’ve got the short end of the stick because they must charge sales tax while many places online do not. In most areas of West Alabama, adding sales tax is equivalent to a 9 percent bump in price.
Chamber of Commerce of West Alabama President and CEO Jim Page said that if sales tax were collected on internet sales, Tuscaloosa would be a big beneficiary.
“The city estimates that they’re losing about $7.5 million in sales tax collections every year,” Page said. “I would dare say that’s a conservative number because we are a college town. We have so many millennials here who are used to shopping online. I think it probably impacts us at a greater level than it probably does in other communities.”
A decision on the case is expected some time in June.