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Supreme Court Online Sales Tax Ruling Worrying Some Small Businesses

By Lindsey Wright, IPB News | Published on in Business, Law, Statewide News
Southern Indiana Scuba will stop online sales in other states. (Photo: Google Maps)

Most online retailers can no longer avoid collecting state sales taxes, thanks to a U.S. Supreme Court ruling this week.  Tax requirements differ from state to stay, and some small businesses say it’s too much to keep up with.  As Indiana Public Broadcasting’s Lindsey Wright reports, that’s moved one Bloomington business to stop selling online to anyone outside the Hoosier state.

The ruling means states can require businesses that sell goods online to collect a sales tax for each purchase.

Indiana, for example, passed legislation requiring businesses outside the state that make at least $100,000 a year to collect a 7 percent tax. At the same time, Indiana businesses have to comply with sales tax laws in the other states they sell in.

Mark Brooks, the Vice President of Southern Indiana Scuba, says his business doesn’t have the resources to keep track of all the information.

“Do they charge for shipping on sales tax? Do they charge for service? You know, with all this stuff out there, it’s not going to be a simple thing, and so for as little as I bring in on the web, I’m just going to shut my web store down.”

Brooks says he’s received online purchases from all over the world and they make up about 10 to 15 percent of his sales. He says he’ll continue selling online to customers in Indiana.

The Chamber of Commerce estimates the ruling could bring the state up to $200 million in annual revenue.