Supreme Court decides online sales tax issue

Many states are bound to take advantage of the green light the Supreme Court has given them, which means consumers will eventually end up having to pay sales tax on more of the things they buy online.

In fact, 52 percent of the state's general-fund revenue - which pays for schools, prisons and social services, among other programs - comes from retail sales and use taxes, according to a 2016 report.

Only five states do not have a state-wide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Wayfair, Amazon.com, Overstock, Etsy, Shopify, and Blue Apron were all down in the 30 minutes following the ruling, with Wayfair falling as much as 9.5 percent.

For most large online retailers (including Amazon - the country's largest), the decision will have little impact, since they've been voluntarily paying state sales taxes for years.


Online shopping is likely to get more expensive in America soon.

He has often raised the issue while referencing Amazon and its CEO and founder, Jeff Bezos.

"(The prior decision) puts both local businesses and many interstate businesses with physical presence at a competitive disadvantage relative to remote sellers", Justice Anthony Kennedy wrote for the majority. "Whatever salience the adage "third time's a charm" has in daily life, it is a poor guide to Supreme Court decision-making". North Dakota, which prevented states from collecting these taxes. First, the Act applies a safe harbor to those who transact only limited business in South Dakota.

But NetChoice, a trade association for e-commerce firms, warned small businesses would have trouble complying with the different tax requirements in each state.


"Any adjustment of those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress", Roberts added. 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%.

Roberts said he agreed that a 51-year-old case partly affirmed by Quill was wrongly decided, but he opposes discarding the physical presence rule because the internet economy has grown in reliance on it. "That should be a message to the states", Heitkamp told Reuters. The firm already collects sales tax on the goods it sells directly, but it does not always do so for products sold by independent merchants using its platform. Congress could also intervene to set a nationwide standard.

"To some extent, the marketplace already addressed this problem", Reames added. He said the legislation would be tailored to fit within the Supreme Court ruling.

The win was welcomed by groups representing brick-and-mortar retailers and decried by e-commerce advocates. Legislative action has been stalled while the Supreme Court was deciding this case.


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