State and local officials are generally pleased with Thursday’s decision by the Supreme Court of the United States that allows states to require out-of-state online businesses to collect sales tax.
The court made that ruling on a 5-4 vote in the case of South Dakota vs. Wayfair, Inc., finding in favor of the state’s law requiring out-of-state online businesses to assess and collect sales tax if they have $100,000 worth of business or 200 transactions in the state in a given year. Wyoming passed a similar law to South Dakota’s in 2017.
State Sen. Ray Peterson, R-Cowley, has been a vocal supporter of requiring online businesses to collect sales tax and is pleased with Thursday’s Supreme Court ruling.
“It’s good news for Wyoming and [also] South Dakota,”
Peterson said. “We followed South Dakota’s lawsuit and basically passed our own bill in Wyoming here a few years ago that basically copied the South Dakota law. We’ve just been waiting in the wings [for] the Supreme Court’s decision.”
Peterson estimated back in May that online sales tax collection could generate $50-70 million per year in extra revenue
“I’ve always said for years that we cannot keep our dollars in the state long enough for them to benefit Wyoming,” Peterson said. “We purchase a lot of things out of state. There’s a state to the north that has no sales tax and pretty much the only thing we collect sales tax on is cars. ... I think this will be a help to Main Street businesses that do collect sales tax.”
Christine Bekes, executive director of the Powell Economic Partnership, said the high court’s decision is a win for state and local businesses and also will “level the playing field” for local businesses when it comes to competing with online retailers.
“As an organization that supports our local businesses, collecting sales tax online is the fair thing to do and definitely helps level the playing field for our shops here in Powell to compete with the online offers,” Bekes said. “However, with the implementation, we need to be mindful of our Wyoming small businesses that also have online sales that the process to submit sales tax does not add an unreasonable administrative burden. The internet does open up markets for all of us on a national and global scale, even for us here in Powell, Wyoming.”
Bekes said it is an “exciting time to be in business,” despite challenges.
“I hope that businesses will not be deterred from entering the online market with their existing businesses if they are not yet there,” Bekes said. “That said, the Legislature set requirements to collect for businesses with online sales over $100,000, or 200 transactions, so this does call out businesses that should have the administrative capacity.”
Another lawmaker pleased with Thursday’s Supreme Court decision is U.S. Sen. Mike Enzi, R-Gillette, who, like Peterson, has been a longtime advocate of online sales tax collection.
“The Supreme Court’s decision [Thursday] is a win for those brick-and-mortar stores that support our communities and the state and local governments that rely on sales and use taxes to provide essential services,” Enzi said in a statement. “I am glad the Court realized the importance of closing this gaping loophole in our tax law that denied states the right to enforce their own laws and to collect the taxes they were owed. This issue has always been about fairness and this ruling will help local businesses, states and local governments.”
Even President Donald Trump weighed in on the court’s ruling on Thursday, tweeting, “Big Supreme Court win on internet sales tax — about time! Big victory for fairness and for our country. Great victory for consumers and retailers.”
However, not everyone is happy with the high court’s ruling on South Dakota vs. Wayfair, Inc.
“With this ruling, onerous compliance costs related to remote sales taxation will threaten to stunt economic dynamism. Hardworking individual and business taxpayers deserve protection from out-of-state tax collectors and regulators,” Jonathan Williams, the chief economist for the American Legislative Exchange Council and vice-president of the Center for State Fiscal Reform, said in a statement. “Congress is now the only way to safeguard innovators and entrepreneurs from aggressive regulation aimed at out-of-state taxpayers and out-of-state voters.”
Grover Norquist, president of Americans for Tax Reform (ATR), also opposed Thursday’s ruling.
“We fought the American Revolution in large part to oppose the very idea of taxation without representation,” Norquist said on ATR’s website. “[Thursday], the Supreme Court announced, ‘oops’ governments can now tax those outside their borders — those who have no political power, no vote, no voice.”
Peterson said online sales tax collection is not a new tax, but it is easier to enforce thanks to the Supreme Court’s decision.
“We are going to start making sure that online businesses that do business here in Wyoming collect that sales tax,” Peterson said. “It’s a fairness issue.”