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Alabama online sales tax goes into effect

Alabama becomes one of ten states implementing an online sales tax on Monday.

Posted: Oct 1, 2018 4:08 PM
Updated: Oct 1, 2018 5:53 PM

When ordering something online, you may see the price tag go up. That's because a Supreme Court ruling in June says states can force online shoppers to pay an online sales tax, and Alabama is doing just that.

A 26-year-old Supreme Court ruling required a store to have a physical presence in the state to collect a sales tax, but that ruling was overturned and now Alabama becomes one of ten states implementing an online sales tax on Monday.

Andrea Parham runs a local brick and mortar store in Huntsville and says at times, it's hard to compete with online retailers.

"They were avoiding sales tax and sometimes you can price compare, price match, to find steeper discounts online," Parham said.

Online giants such as Overstock and Wayfair were able to bypass collecting a state sales tax because they were strictly online, but now, that doesn't matter. Parham says this new tax could help.

"It might steer people to shop locally or see what's in the area before exclusively shopping online," Parham said.

Katie Caldwell is an avid online shopper and says this tax won't change anything for her. In fact, she sees this helping the state.

"Up front, it sounds like a bad thing because people don't want to spend more money, but taxes are extremely beneficial," Caldwell said.

Parham thinks this is a step in the right direction for balancing the playing field between online retailers and brick and mortar stores.

"I do think that it tips it a little more in favor to brick and mortar stores, to local retailers, in a positive way," Parham said.

On Monday, Alabama joined nine other states in enforcing the online state sales tax including: Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Michigan, North Dakota, Washington and Wisconsin.

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