By Lauri Lee
Northside Economic Development Coalition

Technology has changed a lot since 1992. Due to our e-commerce era, the U.S. Supreme Court ruled June 18 that states could collect taxes for online sales far more broadly, overturning their 1992 ruling. For the past 26 years, retailers with catalog sales were shielded from collecting taxes if they didn’t have a physical presence in a state.

The Supreme Court overturned the online sales tax ruling to ensure that the Court’s precedents did not create artificial competitive advantages. They ruled it is no longer practical for online businesses to avoid collecting taxes on many of their sales when other types of businesses are forced to collect them.

This revised tax law creates a level playing field between online retailers and brick-and-mortar businesses because they’ll be charging the same price for identical merchandise — and the same amount of sales tax.

“To avoid paying sales tax, consumers have moved away from shopping in local communities,” said Colin Murray, executive director of Dane Buy Local. “Playing by the same rules will help small businesses and our local economy grow. In turn, this will help them employ more people in our own neighborhood.”

Wisconsin will begin collecting online sales tax revenue Oct. 1. According to Wisconsin’s Fiscal Bureau, a provision in the 2013 budget established that if the state started collecting taxes from online purchases, it would cut income tax rates by a like amount. It’s estimated that taxpayers will see a $52 reduction in their income taxes. The nonpartisan Legislative Fiscal Bureau estimates that over the next year,  $90 million in revenue is expected to be collected for online sales tax and $120 million in the following year.