USA court backs states over web sales tax


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The decision sent share prices for Amazon, Overstock, Wayfair, Ebay and Etsy tumbling. This ruling signals how much the internet has matured. The Retailers Association of MA called the ruling a big win for businesses.

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

That's even though Floridians already are technically supposed to pay sales tax on online purchases.

The ruling will hit small businesses the hardest, but they may not be felt right away. Alaska, Del., Mont., N.H. and Ore...won't be affected by the Supreme Court's ruling.

The case the court ruled on involved a 2016 law passed by South Dakota, which said it was losing out on an estimated $50 million a year in sales tax not collected by out-of-state sellers.

The states that are likely to see the biggest percentage increase in revenue are Louisiana, Tennessee, South Dakota, Oklahoma and Alabama, according to the Barclays research. He continued to write "the rule produces an incentive to avoid physical presence in multiple states". Smaller, local businesses also complained that the previous decisions put them at a disadvantage with online competitors.

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 made a decision to start charging sales tax in every state that levied one.

The case decided was South Dakota v. Wayfair; South Dakota was suing Wayfair, an e-commerce retailer that does not collect state taxes.

This changes everything about internet e-commerce.

The U.S. Supreme Court ruled today that states and local governments are able to collect sales taxes from online retailers that aren't charging them. It overturns a 1992 Supreme Court decision on a North Dakota case that only required taxes on goods from a business located inside the state, letting mail-order catalog sales to go untaxed. Justice Anthony Kennedy wrote the 5-4 decision, joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch. The conservative chief justice, John Roberts, dissented along with liberals Stephen Breyer, Sonia Sotomayor and Elena Kagan.

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.

Small online businesses may be exempt, but just where the line will be drawn is unclear.

"It's going to be very hard for New Hampshire-based businesses to comply with this", she said. Amazon collects state sales tax on items it sells directly, but third party vendors on Amazon are now not required to collect the tax.

But Karr said he wasn't concerned about challenges complying with new regulations that might not be consistent state to state.

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