If there’s one thing Tennesseans are familiar with, it’s the slap in the face known as “sales tax.”
With most counties in Tennessee having the sales tax cranked up to at least 9.75 percent, you start to get a little irritated when something listed at $10 costs you $11 and when you get to something being sold for $100 actually costing you $110, you’re pretty much ready to tell the salesperson to just forget it.
And don’t even get me started on buying a car. You need a second loan just to pay the sales tax.
Tennessee higher-ups justify the sales tax by saying the state is an oasis by not having an income tax. And I suppose that’s true. If they were to put in an income tax, the sales tax would not go away. It might go down a couple of cents right off the bat, but soon a new need for money would be found, and it would go right back up, and we’d end up being taxed for breathing.
For the past two decades or so, we’ve had some respite from sales tax in the form of online ordering. Sure, Amazon now charges us sales tax because they built some facilities in our fair state, but everything else was fair game. It was a special kind of rush to buy something for $25 and it cost, wait for it...$25!
But now, all of that is going away. The Supreme Court, stacked with people who undoubtedly haven’t been in a store and smacked by sales tax in years, have declared that all online businesses, no matter where they’re located, must collect sales tax.
That low scream of despair you heard was accountants everywhere realizing they’re going to have to keep track of and abide by 16 million different tax rates, give or take a million.
There was a way to get around sales tax on Amazon and other such places. You looked for somebody who was “re-selling” through the site but didn’t have a location in your state. And most offered free shipping, so you thumbed your noses at the bigwigs in Nashville as you saved $4.56 in sales tax.
I could be remembering wrong, but it seems like at one point the sales tax rate difference between counties was big enough that you’d make a trip just to save a few cents. If the rate was 8 cents in one county and 6 cents in another, and it was close enough, you could save a few dollars over the course of a month, or even a year.
Now, they all hover between 9.25 and 9.75. I think Sevier County is around 11 percent, but they have some kind of entertainment (tourist trap) tax they add on, so I guess we better hope we never get our own version of Dolly Parton around here.
Will you have to pay sales tax for online purchases based on the county you live in? The state? If it’s just the state, online purchases will still be a little cheaper as the state rate is six cents or so, but if it’s geared toward each county, you’ll pay the same as what you would pay in a store.
Which is what this is all about. Brick and mortar stores, as they’re called, are closing up left and right, though most of the big boys are doing all right. The thinking among the store owners is that if you’re going to pay the same no matter where you shop, then you’ll figure why wait two or three days, or longer, when you can just go to the store and buy it and have it immediately.
I’ve never really bought that as most of the time, cutting out all the middlemen online gives you a cheaper price. Sometimes much cheaper. I’ve seen price differences approaching $50 on some items. That’s worth a few extra tax dollars and avoiding a trip to the store.
Speaking of that, some people also don’t like going to the store, so they’ll never know what you’re charging in the first place.
It is estimated that state and local governments lose out on between $8-$13 billion in sales tax because of online ordering, which is the other reason a very business friendly court ruled gouging us for more would be OK.
We’ll see how it works out, I guess. But don’t think it’ll ever go away. The government is like the mob when it comes to taxes. Once they get a little taste, they’ll never stop eating.