By JOYANNA LOVE/ Senior Staff Writer

Online shopping in Alabama is about to change.

Following the U.S. Supreme Court’s decision on June 21 in South Dakota v. Wayfair, which opens the opportunity for states to require online businesses that do not have a physical presence in the state to charge sales tax, all Alabama online purchases will be required to charge a simplified sale and use tax.

“The Supreme Court’s recent decision is a victory for locally owned businesses,” Jim Byard Jr., Chilton County Chamber of Commerce consultant, said. “Many small and locally owned businesses have been at a disadvantage, due to the longstanding internet sales tax loophole. By providing equal treatment for all businesses, including remote sellers, the decision levels the playing field for Chilton County’s home-owned establishments.”

Incoming Chamber director Francine Wasden echoed his comments.

“I’m thrilled about it, honestly,” Wasden said. “I think it is going to benefit Chilton County and all of our local businesses. The Chamber is in total favor of it.”

According to State District 14 Sen. Cam Ward, this tax rate would be 8 percent and go into effect on Oct. 1.

Guidelines for online retailers were released by the Alabama Department of Revenue on July 3.

“The estimate is that it will generate an additional $26 – 53 million,” Ward said.

The law applies to businesses that sell more than $250,000 in online purchases to Alabama residents. This was actually passed in 2016, in anticipation of when states might be permitted to charge such a tax.

He referred to the previous arrangement as “an unfair playing field.”

Marshell Wilson, owner of Trendy Chic Boutique in Clanton and Selma, made similar comments after hearing of the coming change.

“That’s good, because it gives the brick and mortar more opportunities to be competitive with online business,” Wilson said.

She said not requiring sales tax of online retailers gave them an unfair advantage.

“They could kind of undercut brick and mortar prices, because they don’t have as much overhead already,” Wilson said.

Trendy Chic Boutique generates approximately 20 percent of its sales through online purchases. Wilson said she has always charged sales tax on both the in-store and online purchases.

Margaret Johnson, owner of Rustique Relics, said online stores have created competition for brick and mortar retail stores.

“It think it (the change) is a good thing for local artists … that are keeping money in the city,” Johnson said.

Rustique Relics provides a number of vendor spaces with antique-style and collectible items and requires vendors to be local.

Online avenues for selling personal creation have created additional competition, but Johnson emphasized that buying local helps the artist, their family and the community at-large.

The tax generated from out-of-state, online retailers will be divided between state and local governments. Ward said 50 percent will be divided by county and city governments, while the remaining 50 percent will go to the state. Of the state portion, 70 percent will go to the general fund budget and 30 percent will go to education.

Since all of the growth tax in the state goes to education, having this additional revenue option will help increase funding for general fund budget items, which Ward said rarely get an increase in funding.

Additional legislation may be needed to address some questions, such as if these online sales will be required to pay local sales tax, according to Ward.

The next legislative session begins March 1.