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Online Sales Tax Might Not Be a Windfall for Ohio

a photo of computer on a table
Ohio lawmakers may consider using online sales tax revenue to help fund new initiatives, but an economist says this windfall might not pan out.

State lawmakers have said they want an income tax cut in the upcoming budget, but Gov. Mike DeWine wants them to invest big money in children’s initiatives and the opioid crisis. That has some looking in and out of state for money so they can do both. 

The so-called 'Wayfair' ruling from the U.S. Supreme Court last year allows states to collect sales taxes from out of state online retailers. That’s seen by some in Ohio and the 44 other sales tax states as untapped revenue.

But Wendy Patton with the progressive think tank Policy Matters Ohio said officials may not be able to count on tens of millions of dollars from this.

“Some of the online retailers are already submitting some sales tax collections," Patton said. "So we think that probably the funds that come in will not be as high as some of the estimates that are out there.”

Patton said since some retailers have said they won’t pay those taxes unless they’re required to, she’s urging the Department of Taxation and state lawmakers to make changes to the law – though some may see that as a new tax.