The high court ruled in 1967 and again in 1992 that companies without a physical presence in a state did not have to collect sales taxes. The court found the standard doesn't jibe with current-day online retailing.
Louisiana has laws aimed at being able to take in taxes from online shoppers and already collects some sales taxes from retailers like Amazon. She applauded the Supreme Court's action Thursday, calling it "a huge victory decades in the making for our brick-and-mortar businesses".
When the court ruled in 1967 and 1992 that IL and North Dakota could not squeeze sales taxes from sellers with no presence in those states, there wasn't almost as much at stake.
"Large online retailers who compete with the likes of Walmart and Target have already been collecting and remitting sales tax for some time now because they saw the writing on the wall".
In addition to the impact on individual brick-and-mortar retailers, the online sales tax policy also has implications for the broader economy. Amazon charges consumers in states that impose a sales tax, but only when selling products from its own inventory. The Marketplace Fairness Act (MFA) in the Senate and the Remote Transactions Parity Act (RTPA) in the House both guide states into SSUTA and establish systems to collect destination-based sales taxes that are fair for everyone.
The Supreme Court in 2015 unanimously upheld Colorado's law requiring those notices and reports.
"We are talking about middle-market businesses that have a CFO and maybe no tax department and that rely on an accounting firm to be their tax department", RSM's Kirkell said.
Justices Clarence Thomas, Neil Gorsuch, Ruth Bader Ginsburg and Samuel Alito joined Kennedy in a majority that cut across ideological lines. But he said there were insufficient reasons to overrule the precedents and that Congress should have been left to address the matter.
"The burden will fall disproportionately on small businesses". Justices John Roberts, Stephen Breyer, Elena Kagan, and Sonia Sotomayor dissented in the ruling. "People starting a business selling their embroidered pillowcases or carved decoys can offer their wares throughout the country - but probably not if they have to figure out the tax due on every sale".
The point is further reinforced by analysts like the ones from Baird Equity Research who said they expected a "limited impact on Amazon" from the ruling which means less upside for its rivals. North Dakota, turned on the so-called dormant commerce clause, a judge-created legal doctrine that says states can't unduly burden interstate commerce unless authorized by Congress.
Information for this article was contributed by Greg Stohr, Alexa Green, Molly Schuetz and Spencer Soper of Bloomberg News and by Adam Liptak of The New York Times.