Supreme Court rules in internet sales tax case

UPROXX  Shutterstock

UPROXX Shutterstock

"It will further level the playing field between in-state brick-and-mortar retailers and their online competitors, while also boosting Indiana's sales tax base".

"This is just insuring that all businesses.regardless of whether or not they have a presence in the State of Florida are collecting the tax", said Carolyn Johnson, the Director of Business Economic Development for the Florida Chamber of Commerce.

In a close decision, the Supreme Court on Thursday determined that states can force internet retailers to collect sales taxes from shoppers even in states where they have no physical presence, handing traditional retailers and state governments a major victory. That won't necessarily be the case at Amazon, the world's largest online retailer, which already collects sales tax in every state that has such a tax.

Today's ruling overturns a decision from the Court in 1992 that paved the way for the explosion of online retail in the United States.

"Any state with sales taxes already has some sort of variance when it comes to exemptions and reporting rules", he said. This gave them an advantage over brick-and-mortar stores.

The U.S. Supreme Court today handed down its anticipated decision in South Dakota v. Wayfair.

"It remains to be seen what the exact fiscal impact of this (court) decision will be", said Rick Reames, a former head of the state's Revenue Department.

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Previously, companies without a physical presence in a state were exempt from sales tax collection requirements.

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.

The majority of USA states collect some sales tax on retail purchases, typically charging customers between 4% and 8% for each transaction. It required out of state retailers with more than $100,000 in SD sales to collect sales tax.

Under the ruling Thursday, states can pass laws requiring out-of-state sellers to collect the state's sales tax from customers and send it to the state. Forty-five of the 50 states have sales taxes. Justice Anthony M. Kennedy wrote the majority opinion, joined by Justice Ruth Bader Ginsburg and the court's three most conservative justices. Amazon began collecting sales taxes on purchases in every state previous year, though it does not collect sales taxes on purchases made through third-party vendors. Other retailers-including Etsy, eBay, and Wayfair-are also seeing huge stock dips. Meanwhile, Amazon's expansive operations meant it was already charging sales tax nearly everywhere.

The Trump administration backed South Dakota in the case, arguing that no one could have foreseen how rapidly e-commerce would expand.

Dominic Calabro, president of Florida TaxWatch, a business-oriented advocacy group, said the ability to apply the sales tax to more internet sales will keep the state's tax structure in sync with the evolving economy.

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