Supreme Court rules for states in online sales tax case

Supreme Court rules for states in online sales tax case

Supreme Court rules for states in online sales tax case

The Supreme Court on Thursday ruled that states can collect sales tax from all retailers, even if those retailers do not have a "physical presence" in their state - ultimately paving the way for states to collect sales tax from online retailers.

"Correctly calculating and remitting sales taxes on all e-commerce sales will likely prove baffling for many retailers".

A November 2017 report by the U.S. Government Accountability Office estimated that MA could gain an estimated $169 million to $279 million in additional tax revenue if it could tax all remote sellers. For decades, these sales tax laws were only applicable on purchases that were made from retailers who had a physical presence within that state.

"For the business community, it now means that they may have 50 different sales tax regimens to deal with as they sell to people in the 50 states", Geehern said.

In recent years, some states have begun requiring retailers to charge sales tax. Ten states require out-of-state sellers to notify buyers and inform states of the unpaid sales taxes. Amazon collects state sales tax on items it sells directly, but third party vendors on Amazon are now not required to collect the tax.

Justices Anthony Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito, and Neil Gorsuch delivered the opinion while John Roberts, Stephen Breyer, Sonja Sotomayor, and Elena Kagan dissented.

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The court's conservative wing argued that the previous ruling was sufficient to protect the rights of states, but the Trump administration urged the court to side with South Dakota and expand tax collection powers.

State and local governments had grown increasingly agitated as sales from brick and mortar retailers gave way to online retail, which now comprises approximately 9.5% of the dollar value of total purchases.

According to a federal report, the Supreme Court's decision could see states netting around $13 billion in taxes annually. In doing so, the court overturns two previous rulings that predated the world of e-commerce: the 1992 case, Quill Corp. v.

In a separate statement, Wayfair said it welcomed the "additional clarity" from the Supreme Court decision, while reiterating its support for "a legislative solution that would establish a level playing field for brick-and-mortar and online retailers".

Somewhere along the line, Amazon got so big that it now has what could be called a "physical presence" (in the form of fulfillment centers) in almost every state, and so it chose to start charging sales tax in every state that levied one.

The biggest e-tailer in America, Amazon, now collects sales tax in the 45 states that charge sales tax, though it does not collect taxes on items sold by third-party sellers.

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The National Retail Federation trade group has hailed the Supreme Court's sales tax decision as a "major victory". North Dakota, the 1992 ruling that previously made it illegal.

I'm not really a fan of stare decisis, so I'm not a fan of arguments defending it. Roberts says that Commerce Clause precedent deserved "heightened" stare decisis, which reminds me of JoAnn Galloway stating she "strenuously objects".

South Dakota specifically brought this lawsuit against Wayfair, Overstock.com, and Newegg.

But sellers that only have a physical presence in a single state or a few states have been able to avoid charging customers sales tax when they shipped to addresses outside those states. Perhaps most importantly, the state law does not permit sales tax collection for past purchases, meaning that businesses don't have to worry about a huge tax bill that they never anticipated.

The court decision was praised by Florida business groups.

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