Supreme Court decides online sales tax issue

Wayfair website

That's because lawmakers in Olympia have already moved to expand online sales-tax collections in bits and pieces.

"Retailers have been waiting for this day for more than two decades".

Castro said she was "quite content" with the court's decision, calling it a "huge win for our small businesses who really struggled to compete". Now that consumers make a growing share of their purchases online, states said that cost them billions annually in potential sales tax revenue. "The retail industry is changing, and the Supreme Court has acted correctly in recognizing that it's time for outdated sales tax policies to change as well", National Retail Federation President and CEO Matthew Shay said in a statement.

Washington, which doesn't tax personal income or capital gains, depends heavily on sales-tax revenues to help fund government services.

"The Quill court did not have before it the present realities of the interstate marketplace, where the Internet's prevalence and power have changed the dynamics of the national economy", Justice Anthony Kennedy (left) wrote in the majority opinion, in which he was joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch.

"From my perspective, we don't always know what we are going to sell in South Dakota", Gendelman said. Lawmakers in the state, which has no income tax, passed a law created to directly challenge the physical presence rule.

Sellers that have a physical presence in only a single state or a few states have been able to avoid charging sales taxes when they shipped to addresses outside those states.

E-commerce giant Amazon has collected sales tax from IL shoppers since 2015.

Retailers with many bricks-and-mortar locations, or larger online retailers with large networks of distribution centers, argued the exemption for companies without a physical location gave online competitors who didn't have to collect taxes an unfair advantage. Sellers who use eBay and Etsy, which provide platforms for smaller sellers, also haven't been collecting sales tax nationwide. North Dakota decision, which ruled that companies need to have at least some physical connection with a state for that state can require that company to pay taxes.

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That's a big issue, considering that e-commerce sales in the USA were $435.5 billion past year, vs. $180 billion in mail-order sales in 1992 when the court issued its first ruling on interstate sales and taxes.

Under the ruling Thursday, states can pass laws requiring out-of-state sellers to collect the state's sales tax from customers and send it to the state.

Chief Justice John Roberts offered the dissenting opinion, along with Justices Stephen Breyer, Elena Kagan, and Sonia Sotomayor.

Big Supreme Court win on internet sales tax - about time!

In Oregon, where there is no sales tax, small businesses are anxious they'll have to buy expensive software to determine how much to charge for each purchase from each state. "One vitalizing effect of the Internet has been connecting small, even "micro" businesses to potential buyers across the nation", he wrote, adding, "The court's decision today will surely have the effect of dampening opportunities for commerce in a broad range of new markets".

Lehner thinks there are other factors that will limit the impact of the ruling.

Soon after the law went into effect, South Dakota sued online retailers Wayfair, Newegg and Overstock for allegedly failing to comply.

Retail trade groups praised the ruling, saying it levels the playing field for local and online businesses.


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