News Talk 94.1/AM 1600 Where The Upper Cumberland Talks
Tennessee could benefit from the U.S. Supreme Court’s ruling Thursday regarding online sales tax.
The Court voted in favor of allowing states to require merchants to collect sales tax on online purchases.
Representative Ryan Williams said the decision would likely help local businesses.
“I think for most of those people buying things out of town, it would mean that their revenue from those purchases would be returned to the state,” Williams said. “It would make our local business more competitive than those retailers who are online.”
Tennessee currently owns the second-highest rate in the United States with a 9.46 percent average sales tax across the state. The total takes into account the state’s 7 percent sales tax along with the average local rate of just under 2.5 percent.
Williams said the decision could see the state bringing in about $200 million in additional tax revenue.
“That’s a huge increase in overall revenue to the state,” Williams said. “It’ll be interesting to see how we as fiscal conservatives can figure out a way to make sure we reduce the overall tax on all Tennesseans, and encourage them to shop here and spend their revenue here.”
Only Louisiana has a higher sales tax than Tennessee at just over 10 percent. States like New Hampshire, Delaware, Montana, and Oregon do not collect sales tax.
Williams said it’s likely the state could act on the court’s decision within the next year.
“You could see the state and the Tennessee General Assembly act as early as this spring,” Williams said. “These taxes could [start being] collected in July of next year and distributed accordingly.”
The Court’s 5-4 decision overturns a 1992 ruling in Quill Corp. vs. North Dakota, preventing states from collecting sales tax on retailers unless they had a physical presence in the same place as the consumer.
