SCOTUS ruling has huge implications for online shopping

SCOTUS ruling has huge implications for online shopping

According to the General Accountability Office, prohibitions against collecting sales taxes from online retailers cost states as much as $13.4 billion a year ago. They had resulted in some companies not collecting sales tax on every online purchase.

The U.S. Supreme Court today handed down its anticipated decision in South Dakota v. Wayfair. Others, including Wayfair, Overstock, and Newegg, didn't collect sales tax, and South Dakota has sued them for failing to collect its sales taxes. "It's a drain on our economy and a drain on our main streets and our local sellers", said Jon Hurst, president of the Retailers Association of MA.

The case before the Supreme Court, South Dakota v. Wayfair, stemmed from a law South Dakota passed requiring online retailers to collect and remit sales tax even if they don't have a physical presence in the state. "Technology has also allowed for compliance with state tax laws to become a lot easier too", said Tax Commissioner Ryan Rauschenberger. The state also provides sales tax collection software for free for any business that wants it, and using that software immunizes the business from audit liability.

IN lawmakers anticipated the ruling in 2017 when they passed a law that imposed sales tax on companies that did at least $100,000 worth of business or more than 200 separate transactions in the state in a year.

Illinois Department of Revenue Director Connie Beard says in a statement, "To be clear, this is not a new tax". "Now, California (or any state or city that loses population through exit) can tax people and businesses who do their best to avoid that state or city".

Big chains have been collecting sales tax nationwide because they typically have physical stores in whatever state a purchase is being shipped to.

Internet companies opposed to the South Dakota law appealed.

The decision was a victory for South Dakota, which, like some other states, has no income tax and relies on sales taxes to fund most of the state's services. At the time, the ruling was focused on mail-order catalogs, but it has held up even as shopping has transitioned to online instead.

Attorneys for Crutchfield Corporation could not immediately be reached.

Kaufman said he does not anticipate any legislative action either.

Today's ruling by the Supreme Court has many consumers wondering: Am I going to start paying more in taxes to shop online?

He noted that it could apply not only to behemoths like Amazon and eBay but smaller businesses, like a machining company that sells parts online.

In New York, for example, clothing and footwear costing less than $110 is exempt from state sales tax, but not in some local jurisdictions.

"E-commerce has shown us over the last 10 years, most of those issues are, by and large, solved". For example, South Dakota, like MA, creates a minimum threshold so only someone doing a large amount of business in the state has to collect taxes.

The problems with these earlier decisions, Kennedy said, were made "all the more egregious" by technological innovation.

The ruling comes against a backdrop of Trump's criticism of Amazon, the leading player in online retail, on the issue of taxes and other matters.



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