Supreme Court Has Spoken

Supreme Court Rules States Can Collect Internet Sales Tax

Sales tax parity: Supreme Court wisely nixes online retailer benefit

What will likely happen is that the websites will begin collecting sales tax and pay it back to the state. "We've just been waiting in the wings [for] the Supreme Court's decision".

"HOM welcomes the ruling by the Supreme Court".

"Each year the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the states", he wrote in an opinion joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch.

That's what makes a recent ruling from the United States Supreme Court such a game-changer for online retailers-especially those selling expensive camera and underwater photography gear. One is for retail sales, one is for wholesale sales and one is for insurance commissions. MA has been attempting to jury-rig laws enabling it to collect from on-line retailers, and indeed Amazon has been remitting MA sales taxes thanks to a deal crafted during the Patrick administration.

"A lot about our world and economy has changed in the 26 years since our nation's highest court last ruled on this issue", Holcomb said.

The National Conference of State Legislatures estimated that USA states had foregone as much as US$17.2 billion in sales taxes in 2016 due to the sales tax loophole.

Currently, only five states don't collect state sales taxes Alaska, Delaware, Montana, New Hampshire, and Oregon.County and/or municipal sales taxes are allowed by 38 states, including Alaska and Montana. But the changes could deeply impact smaller vendors who sell their products through e-commerce giants like Amazon.com, Inc., and eBay Inc., removing the slight tax advantage previously enjoyed by those firms.

Those third-party merchants have the advantage of using Amazon's internal bookkeeping software to help keep taxes due in order. Retailers are not in the business of law enforcement, and normally, while citizens are required to obey laws, they are not required to enforce them.

CPA.com and its preferred provider of sales and use tax solutions, Vertex, are offering a pair of July 10 webcasts on the impact of the Supreme Court's major ruling last week on state collection of sales tax for online retailers. Many will face additional costs associated with obtaining software or services created to help them collect the taxes and remit to the appropriate state authorities.

The ruling means some states can expand their tax collection systems, but it will take months to get systems up and running, Behlke said.

For starters, only 16 of the 45 states that collect sales tax have laws on the books defining standards for ecommerce sales tax collection, like the 2017 South Dakota law that prompted the case. He also called it a "Great victory for consumers and retailers", though consumers will ultimately be paying more and businesses weren't uniformly cheering the decision. Writing for the majority however, Justice Anthony Kennedy observed that "Statutes of this sort are likely to embroil courts in technical and arbitrary disputes about what counts as a physical presence". The Small Business & Entrepreneurship Council advocacy group said in a statement, "Small businesses and internet entrepreneurs are not well served at all by this decision". Sales taxes change all the time but the Supreme Court decision is likely to produce a massive wave of changes affecting nearly all jurisdictions.

Chief Justice John Roberts and three of his colleagues would have kept the court's previous decisions in place. The law was a direct challenge to the Court's 1992 decision in Quill, requiring a physical presence.

The case is South Dakota v. Wayfair, 17-494.

The Trump administration backed South Dakota in the case, urging that Quill be overturned or at least limited to catalog sales.

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