Supreme Court rules on internet sales tax

Supreme Court rules states can force online retailers to collect sales tax

"For years, online-only retailers have exploited this loophole that allows them not to collect sales tax, which has given them an unfair competitive advantage over brick-and-mortar stores", said James Miller, a spokesman for the Florida Retail Federation. The ruling explicitly exempts smaller businesses along with all but the most successful of individual sellers using, say, eBay or other online sales channels.

Two popular companies named in the Supreme Court decision - home-goods retailer and electronics merchant - now collect no NY sales tax because they have no physical offices here. The ruling should result in a level playing field for physical retailers: Sales tax can be as high as 12% in some areas, and online businesses - for example, tech and photography retailer B&H - have advertised heavily on the fact that they don't charge sales tax on a majority of online orders.

States also still must announce dates by which retailers must be in compliance, says Scott Peterson, a vice president at Avalara, a manufacturer of tax collection software.

Governor Eric Holcomb is also expressing cautious optimism saying he supports the move but will be "taking a careful look at the ruling to better understand it's implications for IN". Quill still allowed states to tax transactions from these online retailers; it just left the responsibility of submitting those taxes to the buyers themselves, making sales tax collection a logistical nightmare for state governments.

The new rules could make it harder for small online retailers to remain independent, since many lack the infrastructure to handle a complex array of taxes applied in over 9,000 jurisdictions, Bloomberg notes.

Shares of Amazon are up 49% since the beginning of 2018. The stock was last off 0.7 percent and was among the biggest drags on the benchmark S&P 500 stock index. Some states have a base sales tax set at 2.9% while others have set theirs as high as 7.25% and even 10.5%.

"U.S. consumers are extremely savvy, and there will always be competition for the consumer".

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South Dakota then filed a lawsuit to declare that the new law was valid, a suit that eventually found its way to the Supreme Court.

"This is a great day for South Dakota".

Governor Pete Ricketts reacted to the ruling.

In 2015, Justice Kennedy suggested that it was time to reopen the case, and said that the "legal system should find an appropriate case for this court to re-examine [the issue]".

The ruling is widely considered a win for retailers with traditional brick-and-mortar stores struggling to compete with pricing of Amazon and the like.

Tucker's bill establishes a threshold for when online retailers have to collect and remit sales taxes.

"Consumers will quickly feel the negative effects as those businesses dry up or are forced into the arms of Internet giants", he added. It's rarely enforced on individual purchases, however, according to Grant Thornton sales tax expert and University of Minnesota adjunct professor Dale Busacker. North Dakota case in South Dakota v. Wayfair. He continued to write "the rule produces an incentive to avoid physical presence in multiple states".


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