Finally, Supreme Court equalizes internet sales tax rules

US-POLITICS-SUPREME COURT

North Dakota case in South Dakota v. Wayfair.

Under the court's ruling, states will be able to force more people to pay sales tax when they make online purchases.

The Supreme Court has ruled 5-4 (pdf) to greenlight state sales tax for online purchases, reversing a decade-old precedent. In upholding the ruling the Supreme Court overturned a 1992 ruling that required a "physical presence" in a state in order to mandate collection of sales tax. Amazon, which accounts for more than 40% of online retail sales, already collects sales taxes on direct purchases from its site.

Dissenting from the decision, Chief Justice John G. Roberts Jr. wrote: "E-commerce has grown into a significant and vibrant part of our national economy against the backdrop of established rules, including the physical-presence rule".

Shares in Wayfair, an online vendor of home products, was down 2.5 percent Thursday, while shares of online craft marketplace Etsy dropped more than 3 percent.




Last year, third-party sales earned Amazon almost $32 billion across the globe, according to SEC filings, and the business is growing rapidly. Matt bought has a Syracuse gnome thta he bought online, and since the store has no physical presence in Arizona, he didn't have to pay sales tax.

Ricketts had recommended that the state wait for the Supreme Court decision as a compromise.

Five states - Delaware, Montana, Oregon, New Hampshire, and Alaska - do not have a state sales tax. States and municipalities stand to gain billions of dollars in annual revenue. The 1992 decision, the court found, was "unsound and incorrect", and unfairly penalized traditional brick-and-mortar retail outlets.

"The Indiana Chamber has been a long-time advocate for online sales tax collection; it is one of the key goals in our Indiana Vision 2025 plan. But once that happens, Trump Store and other internet retailers are going to have to start collecting sales taxes in states where they do a meaningful amount of business". For instance, the tax now could be collected from S.C. shoppers who shop online at outdoor retailer L.L. Bean. Bloomberg estimates that broader taxing power will let state and local governments collect an extra $8 billion to $23 billion a year.

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