Online Sales Tax Ruling Could Boost Kentucky Revenue

Jun 25, 2018

Credit Sergey Kuzmin / 123rf Stock Photo

A decision Thursday from the U.S. Supreme Court could mean increased revenue for Kentucky. The ruling will allow states to collect sales taxes from online retailers.

Previous rulings limited a state’s ability to collect that revenue if the business didn’t have a physical presence in the state. Kentucky Center for Economic Policy Executive Director Jason Bailey said while there won’t be an immediate effect felt from the Supreme Court decision, it will eventually lead to more money for the commonwealth.

“But there was a study by the U.S. Government Accountability office in November that estimated a potential between $93 million to $140 million in Kentucky if the tax was collected from all remote sellers,” he said.

Bailey said Kentucky is well positioned to begin implementing the law because the state is part of the streamlined sales tax project. That’s an effort to make it easier on out-of-state retailers to collect and remit those taxes, something that factored into Thursday’s Supreme Court decision.