Many online purchases will now be taxed after recent Supreme Court ruling

Local News

Gone are the days where you didn’t have to pay taxes on certain things you buy online.

A Supreme Court ruling Thursday now allows states to collect sales taxes from online businesses.

The high court issued its 5-4 decision, overturning a 1992 ruling that restricted states from collecting certain taxes from out-of-state retailers if they didn’t have a physical presence in the state.

So what does this mean for shoppers? Consumers may pay more for their online purchases because they will now have to pay for the tax. 

“These businesses now that are going to get charged the sales tax are going to pass it on to you and I,” said Alan Akina, CEO of 101 Financial.

This levels the playing field between online retailers and brick-and-mortar stores, but Akina believes this will not stop people from shopping online.

“I think the convenience of buying online will overcome that extra cost of the tax and then companies are smart enough to put in their marketing material to say the cost is this plus tax. Once they get their customers used to that, it should start to smooth everything out,” he said. 

Gov. David Ige says the Supreme Court’s decision is a big victory because states have lost a lot of revenue from online purchases. He states:

“I’m pleased to have recently signed a bill (Act 41)  that allows Hawaii to begin collecting taxes that are owed by online and remote businesses that sell their products in the State of Hawaii.”

This only applies to bigger, online retailers making $100,000 or more in sales each year, or 200 or more transactions. It goes into effect July 1 and the state projects a revenue of about $6.8 million for fiscal year 2019 and about $7.6 million the year after that. 

Some big online companies have already implemented tax in the transactions. You may have noticed Amazon started doing it in April of last year.

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