Supreme Court Overturns Ban on Online Sales Tax


The South Dakota law only applied the tax to online retailers that had at least $100,000 of annual sales in the state or 200 individual transactions.

In 2014, Amazon, the largest online retailer, began collecting the tax in Florida after it opened a series of "fulfillment centers" in the state.

Online retailers, whose stocks plunged on the news Thursday, will have to deal with a hodgepodge system until Congress enacts a federal standard - which is unlikely this year given midterm elections in November.

Here in Florida, state officials are stressing that this is not a new tax.

National retailers such as Apple, Target and Walmart are already collecting online sales taxes.

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The last major vote on a statewide sales tax was in 2004, when the Alaska Senate voted 7-12 against a 3 percent sales tax proposed by the Senate's minority Republicans.

State and local governments are analyzing the specific ramifications.

"This Supreme Court ruling will help level the playing field between our Hoosier-based companies that operate retail stores and out-of-state companies that sell products and services online in our state", Holcomb said in a statement.

"This is a big win for states", he said. "Big victory for fairness and for our country". Consumers themselves could be ordered to pay sales taxes, but of course, compliance was extremely low.

- New Hampshire online retailers could be on the hook to collect sales tax from dozens of states and thousands of localities after the U.S. Supreme Court Thursday upheld South Dakota's online sales tax law.

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Now, states can push ahead with legislation requiring companies to collect and remit sales taxes for goods bought online elsewhere. The cases the court overturned said that if a business was shipping a customer's purchase to a state where the business didn't have a physical presence such as a warehouse or office, the business didn't have to collect the state's sales tax. North Dakota, which had said that the Constitution bars states from requiring businesses to collect sales taxes unless they have a substantial connection to the state.

"The internet's prevalence and power have changed the dynamics of the national economy", Justice Kennedy wrote.

Justice Anthony Kennedy wrote - in an opinion joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch - that the previous decisions were flawed. Marketplace sellers weren't previously required to automatically collect sales tax on their sales, and the ruling may hurt their sales. "Today, remote retailers.effectively receive a subsidy because of how unlikely it is their customers will ever pay state sales and use taxes that they undeniably owe".

"So there's already a lot of sales tax collected online". For example, the popular electronics seller B&H only charges sales tax in NY and New Jersey, where it has a physical presence. "This is an irresponsible decision that will have terrible implications for any small business that sells online - including Company Folders".

Why it matters: States had long complained that they were losing out on billions of dollars in lost tax revenues, and that the old rules failed to recognize the growing importance of the internet economy. Lawmakers in the state, which has no income tax, passed a law created to directly challenge the Supreme Court's 1992 decision.

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