TERRE HAUTE, Ind. (WTHI) - Local small business owners are weighing in after the U.S. Supreme Court made a landmark decision regarding sales tax.
The court overruled two old decisions in favor of forty states. Now states can force consumers to pay sales tax when shopping online.
Brent Compton owns Pacesetter Sports in Terre Haute. He's been in business thirty-five years selling sporting goods and footwear in his store and online. Compton says he's paid sales tax to the state from all sales. Until now, companies without a physical presence in Indiana have not been held to that same requirement.
Compton says, "In fact, I had a customer tell me just this last week that they weren't going to use us for their online store because the company that they'd been using doesn't charge them sales tax."
The U.S. Supreme Court ruled earlier this week states can make shoppers pay the sales tax for online purchases. Under previous rulings, if stores like Amazon and Wayfair did not have an office or warehouse in the state they did not have to collect sales tax.
Compton says, "The online stores are out of state, often times, many states away and with them not paying taxes and being able to save seven to ten percent on every single item, it adds up pretty quickly."
In many cases, if you bought something online you should have paid the taxes on your own but may not have known because you were never charged.
The Indiana Chamber of Commerce reports this has resulted in a substantial loss of revenue for the state.
Vice President of Taxation and Public Finance Bill Waltz says, "The Indiana Chamber has been a long-time advocate for online sales tax collection; it is one of the key goals in our Indiana Vision 2025 plan. We applaud state legislators who took the initiative in the 2017 Indiana General Assembly to prepare for this hoped-for decision. That legislation, which the Indiana Chamber strongly supported, has our state perfectly poised to fully implement an online sales tax law and trigger the tax collection."
Compton says, "I'm hoping that the change happens really quick. I'm just a little cautious in that I don't know that it's just going to happen overnight. I don't know how much some of these places are even set up to change it just instantly."
Governor Eric Holcomb is also expressing cautious optimism saying he supports the move but will be "taking a careful look at the ruling to better understand it's implications for Indiana."
President Donald Trump is supporting the decision calling it a "big victory."
Others argue this is an issue that should be decided by congress, not the court.