Online sales tax collections coming first of year
Remote sellers, or those online without a physical building from which they sell their products, will no longer get a free pass in Nebraska from charging their customers sales tax.
A U.S. Supreme Court precedent-setting ruling in June, South Dakota vs. Wayfair, reversed a 26-year-old decision that prevented online sales tax from being collected unless that business had a physical presence.
With the ruling fresh on the books, Nebraska officials announced last week that remote sellers will now be required to collect and remit sales tax in the state starting the first of the year.
Locally, Imperial collects a 1 percent city sales tax on top of the state’s 5.5 percent. While the state expects as much as $30 to $40 million additional income from online sales tax, it’s hard to estimate how much extra that will bring into Imperial. Jason Tuller, community development director, said Imperial takes in an average of $354,000 per year from its 1 percent sales tax on eligible in-store purchases, but there’s no way to know how much online sales are made in the community. He’s received no information yet on how the local tax on online sales will be distributed to the community. That will be interesting to watch.
Before the ruling, some companies like Amazon were voluntarily collecting sales tax from its customers, but the vast majority were not.
There are some exceptions that will be made, based on the Supreme Court decision. Remote sellers with sales of $100,000 or less or with fewer than 200 separate transactions in Nebraska annually will be exempt from collecting sales tax.
While it will mean more cost for shoppers who make online purchases, the collection of this sales tax levels the playing field with local businesses who are here every day. And why shouldn’t it? Online businesses are in direct competition with our local, store front businesses.
Come Jan. 1, that will change and make it fairer with businesses who actually operate here and support their local communities year after year.