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Some QC business owners say online sales tax decision could level the playing field

The Hawkeye State will collect online sales tax next year. Illinois included similar rules in its most recent budget, which take effect in October.
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DAVENPORT, Iowa-- A recent Supreme Court decision means online shoppers could see higher costs at checkout.

But one local business owner said it was only a matter of time before this ruling was made.

"Brick and mortars have a hugely increased level of competition from online-only retailers," said Jennifer Chen, the owner of the Plaid Rabbit in the East Village. "It's hard to compete when there's always a seven percent discount on everything because consumers in our area would normally pay a seven percent sales tax and they're not paying that to the online retailers."

A Supreme Court decision from last week now lets states create laws to require online retailers to collect sales tax.

Earlier this year, Iowa passed legislation that would do just that. The Hawkeye State will collect online sales tax next year. Illinois included similar rules in its most recent budget, which take effect in October.

"We forget what sales tax goes toward. Sometimes when you shop online and you skip the sales tax, you're really sort of taking money out of your own community's pocket," Chen said.

But some people are worried about what the ruling could do to small, online retailers.

"There's a big difference between the big retailers and someone like us," said Steve Grubbs, the owner of victorystore.com.

He sells yard signs, often for political parties, and does a lot of business online.

Grubbs said the new rule could be a hassle since businesses will have to file sales tax permits with all 50 states.

He also said the tax could turn some buyers away.

"We sell a lot of signs..." he said. "On $1,000, it's $70 of sales tax... So that could definitely change the buying decision."

One thing Grubbs and Chen agree on is that the Supreme Court decision could level the playing field between stores and online retailers.

"The good news is that everyone will be playing under the same rules," Grubbs said.