Sales Tax Win

Sales Tax by Nick Youngson CC BY-SA 3.0 ImageCreator

These days it is hard to find someone that hasn’t bought an item off of Amazon, let alone just purchased something, anything online. In 2017 e-commerce sales totaled over $453 billion, a figure that continues to spiral upward by leaps and bounds each year.

This of course affects communities large and small as more and more people are utilizing online sources to obtain their goods and services. Not only does this negatively impact the local “brick and mortar” stores, but it also impacts the sales tax revenues of the local communities as sales in local stores trend downward. In a November 2017 report the U.S. Government Accountability Office estimated that roughly $8.5-$13 billion in taxes go uncollected due to e-commerce annually.

When you think about it, that is a massive figure. Consider the funding issues that communities are having with failing infrastructure. These lost sales tax dollars would represent a significant shot in the arm to fix potholed roads and unstable bridges.

Thankfully there have been recent rumblings and even some action taken in some states to correct this issue. One state, South Dakota, has made the ultimate effort get online retailers to start charging sales tax. They took online retailer Wayfair all the way to the Supreme Court. They won as well, paving a path for legislators in other states to put forward bills to correct this issue.

The National League of Cities’ CitiesSpeak website has a good article on the court case and its impacts.

Read the article here.

This is a win for states and communities and should be celebrated as such. But work still needs to be done on the legislative side to fix the loopholes and help make it a more level playing field between the local and the online retailers.