Legal analysts heralded Thursday’s Supreme Court decision about online shoppers paying sales tax as a victory for states. We herald it as a victory for you, the taxpayer, and our communities.
The transition from brick-and-mortar stores to online shopping created a topsy-turvy world. Out-of-town behemoths had the advantage on the final price you paid, since they didn’t charge a sales tax unless they kept a physical presence somewhere in Ohio. The little guy, your neighbor running a local store, had the disadvantage because he had no choice but to charge and pass on the sales tax.
It’s been that way since a 1992 ruling. As an example of how outdated that logic was, it focused more on catalog sales, a now-nostalgic service that predates the modern internet.
The U.S. Supreme Court ruled 5-4 on the South Dakota v. Wayfair case Thursday. It evens the playing field entirely. If the online retailer can still win on price and service, good for him. If the local retailer convinces people he’s the better option, that’s great too. At least now everyone’s judged on the same things. Both pay their share toward our governance and infrastructure.
But how’s this a win for the taxpayer? We’re all going to have to pay sales taxes on our online orders from out-of-state companies without an Ohio location.
The answer is the money coming back into our communities. The sales tax is as close to a use tax as we have in this state. The people who have more expendable income to buy more things chip in more toward that sales tax.
If the state follows our wishes, we’ll see all of that money coming right back to the local level.
States claimed they missed out on billions of dollars of taxes, which they’ll begin receiving as soon as the Christmas shopping season this year. When this money enters the state coffers, the state doesn’t need the windfall. Its budget is already balanced. Our representatives must pass it along instead of spending it:
• Give us some of our money back. Lower Ohio’s income taxes, and make us more competitive with the rest of the country. WalletHub reports Ohio has the seventh-highest overall effective state and local tax rate and 13th highest income tax. It’s your money; you deserve spend it as you see fit.
• Allocate some of the money to road projects. Ohio’s infrastructure is starting to crumble, and now’s the time to take care of it. After all, those delivery trucks dropping your online order off at your front porch did help tear up the roads it travelled, and the money from the gas tax just isn’t keeping up with the damage.
• Pass the rest of the money on to local governments. They’ve seen too much money that should’ve gone to them chopped from their budgets. Voters, tired of being asked for additional funding, keep saying no to tax increases. In May, 40 percent of requests for additional funding failed in Ohio, including the Allen County commissioners’ ask for a sales tax increase.
This ruling made for some odd combinations in the vote, such as liberal Justice Ruth Bader Ginsberg joining four more conservative justices in the majority and conservative Chief Justice John Roberts siding with three more liberal justices.
That balance shows this isn’t a matter of political ideology but of fairness to everyone, especially local consumers.