Internet sales tax ruling ‘rebalances things’

Jenny Kane  Associated Press

Jenny Kane Associated Press

It passed a law that required all merchants to collect a 4.5 percent sales tax as long as they had more than $100,000 in sales or more than 200 individual transactions in the state. E-tailers still won't have to pay for the expenses associated with brick-and-mortar stores, but new sales taxes will help even the playing field between online and physical retail.

In a case that could likely mean consumers paying more nationwide, the Supreme Court Thursday opened the door for states to collect sales taxes on purchases from online retailers even if that company doesn't have a physical presence in that state.

President Donald Trump praised a Supreme Court ruling that could soon lead to online retailers having to collect state sales taxes in 45 states. This latest Supreme Court ruling said that earlier decision was obsolete in an era of explosive e-commerce. So far, more than 250 companies have registered to collect sales taxes on MA consumers as a result, although the rule remains subject to a court challenge by Crutchfield, an out-of-state electronics retailer.

NRF and other retail groups said in a second brief filed this year that lack of uniform collection is "inflicting extreme harm and unfairness" on local retailers by "distorting the retail market in favor of absentee ecommerce".

"We were hoping one way or another it would be overturned, either by the Supreme Court or Congress", he said.

Yesterday, the Supreme Court decision in Wayfair v. Amazon.com, with its network of warehouses, also collects sales tax in every state that charges it, though third-party sellers who use the site to sell goods don't have to. The Government Accountability Office estimated that state and local governments could have collected between $8 billion and $13 billion in sales taxes in 2017 "if states were given authority to require sales tax collection from all remote sellers".

"The burden will fall disproportionately on small businesses".

But NetChoice, a trade association for e-commerce firms, warned small businesses would have trouble complying with the different tax requirements in each state.

South Dakota wanted out-of-state retailers to begin collecting the tax and sued several of them: Overstock.com, electronics retailer Newegg and home goods company Wayfair.

This also may impact eBay sellers.

"This is a great day for South Dakota".

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