Today in Washington, the highest court in the land ruling on states’ rights and the ability to tax internet sales.
In a case that could likely mean consumers paying more nationwide, the Supreme Court Thursday opened the door for states to collect sales tax on purchases from online retailers, even if that company doesn’t have a physical presence in that state. The vote on the case was a 5/4 split, with Justices Kennedy, Thomas, Ginsburg, and Gorsuch voting for the state internet taxing.
Today’s ruling could help Pennsylvania enforce a law that’s already on the Commonwealth’s books.
Brick-and-mortar retailers already deal with some expenses that online retailers can avoid. Now, some retailers say the decision levels the playing field.
Pennsylvania’s Marketplace Sales Act requires any online business that sells $10,000 or more worth of merchandise to residents to collect sales tax or to report the sales so that taxes can be collected when people file their returns.
E Lane Boutique’s Owner Allison Gorman likes the measure. “I think it’s fair… If they have to pay it here, then why not online?”
While clothing is not taxed in Pennsylvania, accessories like purses and watches are still taxable.
Gene Britten of Achilles Running Shop says he worked for the State’s Department of Revenue for more than 30 years. “It’s getting people to shop local and that’s one of the main things every vendor or every store or retailer in Pennsylvania wants… I was… right there experiencing the problems that local vendors had with trying to compete without out-of-state vendors.”
A La Carte’s Owner Mimi Sherwin says the change was needed. “It’s given an unfair advantage to online retailers for so long. It’s nice to have an even playing field, now.”
Business owners say they can offer an experience that shoppers just can’t find online. Sherwin tells us, “Personal service. Knowing your customers. Welcoming them…”
Online customers were already supposed to pay taxes when they filed returns if they weren’t collected by the seller, but the Department of Revenue says many people did not.
And, while this could be a plus for brick-and-mortar stores, there’s already some concern from small, online business owners.