Supreme Court rules in favor of online sales tax

Internet retailers can be required to collect sales taxes in states where they have no physical presence the Supreme Court ruled

John Taggart New York Times File 2017 A worker inside the Wayfair distribution center in Cranbury N.J

On Thursday, the United State Supreme Court overturned two decisions regarding states' collection of taxes from online sales. The internet has changed retailing, and Justice Anthony Kennedy, who wrote the new decision, said, "each year, the physical presence rule becomes further removed from economic reality".

While a Supreme Court ruling on sales taxes will create more obligations and expenses for many small online retailers, owners are already thinking about how they'll comply. She says the new online sales tax won't stop her.

Honestly, this shouldn't be surprising to anyone, but it's a bummer nonetheless.

A new CT law goes into effect at the end of this year to collect taxes from some online retailers.

Maniace noted that while the opinion addresses South Dakota law, the case has enormous national ramifications both short term and long term.

"I would really love for our government to get behind the idea of small business and when you do something like this it does not encourage small business", Keyton said.

The 5-4 decision was a victory for South Dakota, which wanted the high court's blessing for its recently enacted sales tax on internet transactions.

Lawmakers have tried unsuccessfully to pass online sales tax legislation for years, with the most recent attempt failing after several conservatives called the provision a tax increase on online shoppers.

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Previous Supreme Court decisions prevented states from collecting sales tax from out-of-state retailers with no physical presence in the state because the court concluded that would be an unfair burden on interstate commerce.

States that rely more heavily on sales tax - as opposed to personal income tax, for instance - "are the big winners here and could see real budget gains if they follow South Dakota's example", said Fitch Ratings analyst Stephen Walsh. The Act takes effect on July 1, 2018 and applies to taxable years beginning after December 31, 2017.

But sellers that only have a physical presence in a single state or a few states could avoid charging customers sales tax when they're shipping to addresses outside those states.

The Supreme Court of the United States today decided Wayfair, Inc. v. South Dakota's governor has said his state loses out on an estimated $50 million a year in sales tax that doesn't get collected by out-of-state sellers.

Nevertheless, the Court stopped short of giving its full blessing to the South Dakota law, stating that the taxpayers had made other challenges to the law and those need to be addressed by the state courts first.

"We've been trying to phase out the sales tax on food so this gives us an opportunity to work on different parts of Tennessee's overall tax structure". IL residents are required to pay state sales tax if the site doesn't add it.

Second, Hawaii is not a member of the Streamlined Sales Tax Agreement and can not be a member unless its laws are amended significantly. He believes the new ruling will "level the playing field" for brick and mortar stores in West Virginia. Will a sales tax on online purchases affect your shopping habits?

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