Online Shopping Could Get Pricier

States now have more latitude to collect sales tax on internet purchases.

(Image credit: ©JGI/Jamie Grill /Blend Images LLC)

If you live in a state that charges sales tax, you could soon pay more for your online purchases. In June, the Supreme Court ruled that South Dakota may require online retailers with a certain volume of sales in the state to collect sales tax, even if the sellers don’t have a physical presence in South Dakota. The ruling has paved the way for other states to collect sales tax on more online purchases.

Hawaii, Kentucky and Vermont passed legislation effective July 1 of this year that requires remote sellers to collect sales tax. Alabama, Connecticut, Georgia, Illinois, Iowa, North Dakota and Wis­consin have new laws that will go into effect this fall or winter. Other states passed laws last year that would become enforceable pending rulings by the state courts. And several states—including California, Kansas and New York, which have high sales tax rates—are likely to tackle the issue in upcoming legislative sessions. In most states, you can expect to be hit with local sales tax for

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Lisa Gerstner
Editor, Kiplinger Personal Finance magazine

Lisa has been the editor of Kiplinger Personal Finance since June 2023. Previously, she spent more than a decade reporting and writing for the magazine on a variety of topics, including credit, banking and retirement. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.