AL retailers have eyes on Supreme Court case

AL retailers have eyes on Supreme Court case

MONTGOMERY, AL (WSFA) - Millions of dollars of taxable sales hang in the balance of a court case before the Supreme Court Tuesday.

The case centers on whether or not online retailers, without a physical presence in a state, should need to collect a sales tax from buyers.

Currently, the state does collect some online sales tax through the Simplified Use Tax program instituted in 2015. Some companies, like Amazon, do add sales tax sending the money to Alabama.

However many companies do not.

"There are hundreds of companies that have not signed on." said Rep. Steve Clouse, R-Ozark.

When it comes to these companies that have not signed on, Clouse said, "it's practically impossible" to make them pay.

The state is likely missing out on millions of dollars of taxable revenue. Clouse said it is hard to tell the exact amount because the state just does not know how much is being bought by Alabamians online.

This current rule, which allows companies to sell goods to a state without collecting sales tax, goes back to a court ruling dealing with mail order catalogs.

"Just like technology has changed how we shop, the way that retail happens, it has changed the era of sales tax collections," said Alabama Retail Association spokesperson Melissa Warnke.

Alabama brick-and-mortar stores are also interested in the ruling from the supreme court.

"Right now, brick-and-mortar retailers have a competitive disadvantage," Warnke said.

According to Warnke, the online retailers who do not tack on sales tax have an innate advantage over brick-and-mortar stores, thanks to a lower price.

However to do away with that disadvantage the Supreme Court would have to overturn a decades-old precedent.

Early indications show many of the judges seem against changing precedent and that it should be congress, not the courts, to change the law.

The court will rule on the case this summer.

Copyright 2018 WSFA 12 News. All rights reserved.