Supreme Court sales tax ruling
COLUMBIA - A Supreme Court ruling that allows states to charge online retailers sales tax has Columbia businesses rejoicing.
On Thursday, the Court ruled states now have the power to force Internet retailers to pay sales tax in states where they don't have a physical presence, overruling their own decision in the 1992 case Quill Corporation v. North Dakota.
Columbia business leaders cheered the decision, hailing it as an equalizer for brick and mortar stores forced to pay a sales tax their online competitor were previously exempt from.
"Overall, it's a win. It's a victory for leveling the playing field and it's good for the business climate in Columbia," Columbia Chamber of Commerce Government Affairs Director Jerry Dowell said.
The Court's decision also has Columbia government officials breathing a sigh of relief. Much of Columbia's government revenue stems from sales tax, something that has suffered greatly at the hands of online competition.
"I think it's the first in a series of steps that have to happen before we address some of the long term revenue trends we've seen," City Council member Matt Pizter said. "Columbia, like a lot of other city and municipalities, has been losing a lot of revenue to online sales over the past number of years."
Dowell said it's hard to convince people to to buy a product from a local store when they know they can get for a lower price online.
"People are creatures of habit, looking for the lowest cost product for the best price and when you can get a 6,7,8 percent advantage by not charging sales tax in that state, you know, people are creatures of habit," Dowell said. "They want to save the most amount of money they can and get the same product."
Dowell said the advantage of online retailers would always show itself the same way.
"Somebody will try on a pair of shoes or take a look at something, a radio or whatever and see what they think about it, see if it fits, if they like it and then they'll go online and buy it," he said.
According to a recent study by the United States Government Accountability Office, Missouri misses out on anywhere from $180 to $275 million annually in state and local sales tax.
According to the Missouri Budget Group, the Court's ruling is a chance for Missouri to revitalize it's communities.
“Taxes owed for online purchases have gone mostly uncollected, and have made it harder for both our state and our towns to meet the needs of Missourians all across the state," Executive Director Amy Blouin. "The Court’s ruling means we can start to reinvest in our communities.”
While the Missouri Budget Group is urging lawmakers to take action and make sure Missouri cashes in on the ruling, Dowell said it will take some time for the decision to trickle down to the city level.
"It'll be a complicated thing that'll be have to worked out, I'm sure there's going to have to be some legislation to fix some of the things to implement and regulate how the tax collection is going to occur," he said.
Tyson Hunt is the co-founder of Logboat Brewery and a member of the Chamber of Commerce. He said in the wake of the ruling, people should shop locally, especially now that there isn't an advantage to doing it online.
"Let's support our local businesses that are here in this community and doing things the right way," he said.