Supreme Court ruling is a victory for local
THE ISSUE: This summer’s U.S. Supreme Court ruling provides that internet retailers must pay the same local sales taxes as other businesses.
OUR VIEW: This ruling helps level the retail playing field between internet retailers and those with a physical location.
CARLINVILLE (Aug. 30 2018) – As we get ready to close the books on the summer of 2018 and celebrate Labor Day, it is important to pause and reflect on what we hope will prove to be a significant win for local merchants locally and across the nation. The U.S. Supreme Court ruled in June that e-commerce retailers should pay the same local sales taxes as those with a physical presence. In anticipation of the Supreme Court’s decision, the state of Illinois passed a measure into the budget that allows for the collection of taxes from e-commerce retailers if their cumulative gross receipts exceed $100,000 or if they have more than 200 separate transactions from customers in Illinois.
It was a narrow victory at the Supreme Court level, only passing by a 5-4 margin, but nevertheless it is still a win. Justice Anthony Kennedy wrote the precedents to the law were “unsound and incorrect. Each year it becomes further removed from economic reality and results in significant revenue losses to the states.”
Local retailers have long argued that e-commerce businesses have an unfair price advantage by not having to charge sales tax. Our local communities have always advocated the importance of shopping local when possible as it is the local businesses who pay taxes which support our cities and schools and nonprofit organizations, all of whom depend on community support.
State Senator Andy Manar helped advance the bipartisan legislation that the state of Illinois included in the budget this year. Manar said he has met with local small business owners and listened to their concerns about this issue. “Out-of-state corporations have been gaming the system for a long time with alarming consequences for cities all over the district I represent. If we don’t correct this imbalance I fear some of our rural communities will be ghost towns in a few years.”
Local businesses will concur that it is deceiving at best when online retailers or the big box stores promote a lower price. Often the additional services necessary are not included. A wonderful local example of this is described by Hicks Maytag in Gillespie in their story which can be found in today’s edition of our Fall Home Improvement special section. Consumers need to consider the big picture as it relates to their local economy when making purchases. The ripple effect is tremendous.
It has been estimated by the U.S. Government Accountability Office in their published report regarding this matter, that collectively the states were losing between $8.5 billion to $13 billion in annual uncollected taxes for e-commerce purchases. Certainly, this is no small amount of money and it is long overdue that the retail playing field be corrected in favor of those businesses who have a physical presence and do their part by paying local and state taxes to support their communities.