Counties pleased with court decision to allow online sales tax
‘Today’s decision creates a level playing field for our Main Street economies.’ – NYSAC President MaryEllen Odell
Press Release, NYS Association of Counties
The U.S. Supreme Court today ruled that states can charge out-of-state retailers sales tax, at least in some circumstances, even if they don’t have a store or warehouse in the state. This ruling opens the door to allow sales taxes collection on internet purchases.
Counties and New York State have seen stagnation or reductions in sales tax revenues due to a combination of factors, including the Great Recession that began in 2008 and a dramatic increase in online retail activity in which sales tax collection is not required. Brick and mortar retail stores in communities across the state have seen a reduction in retail activity, with some closing and laying off New Yorkers who work in their stores and live in our communities.
In order to deliver essential public services, counties rely on sales tax receipts to offset property taxes, while also providing a significant revenue source for cities, towns, school districts and villages through sales tax sharing arrangements. Today’s ruling has implications for our local governments and their ability to best serve our communities.
“Today’s decision by the U.S. Supreme Court is a common sense, practical, modern application of taxation to the new economy,” said Stephen Acquario, executive director of NYSAC. “The Court held that requiring remote seller to collect and remit sales tax to the state where the purchase was made is not an undue burden on interstate commerce, and as such, states have the right to require the tax for on online, out of state, sales.”
According to the Supreme Court, “it is an inescapable fact of modern commercial life that a substantial amount of business is transacted with no need for physical presence within a state in which business is conducted.”
Acquario said nearly the entire property tax collected by counties is used for state-mandated services. The sales tax is a revenue that can used to fund critical life-saving local public safety programs, infrastructure, and other programs for seniors and veterans, he said.
“My position has always been that sales taxes should be a level playing field,” said NYSAC President MaryEllen Odell. “Today’s decision creates a level playing field for our Main Street economies. I know small local businesses have felt they can’t compete against global interests online as discounts and no taxation have been the rule. This decision will help our local businesses.”