Supreme Court’s sales tax decision will benefit small, local businesses

On Thursday, the Supreme Court overturned a 1992 decision that companies that didn’t have a nexus, or connection, in a certain state wouldn’t be required to charge sales tax.

The Columbia Chamber of Commerce’s Government Affairs director, Jerry Dowell, said that led to larger online retailers advertising that consumers could save money buying from them.

“It gave a large disadvantage to our local businesses,” he said.

Dowell said it’s likely that the decision will take awhile to go into effect because states and retailers will need to figure out how this will affect business. Missouri is a complicated state because it has more than 1,000 special taxing jurisdictions and that will take time to regulate.

The Supreme Court’s ruling lays a foundation that federal and state lawmakers can follow. Some are concerned that without federal oversight, states may interpret the decision in a multitude of ways.

For now, Dowell said that the ruling will be a win for those mom and pop shops.

“If we can level the playing field for those business, that’s gonna be good for the community,” he said. “We’re going to encourage more people to shop locally and keep the money in Columbia. Regardless of the sales tax benefit, it will benefit our small businesses in Columbia.”

One federal report released last year found that state and local governments lost out on $8 to $13 billion in tax revenue because they couldn’t collect sales taxes from online retailers.