NRF welcomes Supreme Court online retail tax ruling

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"The judgment of the Supreme Court of South Dakota is vacated, and the case is remanded for further proceedings not inconsistent with this opinion", the opinion stated. North Dakota, that said companies can not be forced to collect sales tax from customers in a state where they don't have a physical presence like a store or distribution center. That will prevent Amazon from taking advantage of a previous loophole that had enabled states to charge sales tax on customers only if the seller has a physical presence in the state, whether that be a physical store, an office or a warehouse.

The US Supreme Court just upended 26 years of tax law by overturning a ruling that had blocked states from collecting sales taxes for all online purchases.

In the early days of the internet, online retailers were exempted from sales taxes in states in which they did not have a physical presence. entered into an agreement with the state of Oklahoma to collect and remit sales taxes beginning in 2017.

According to a federal report, the Supreme Court's decision could see states netting around $13 billion in taxes annually.

IL consumers will likely see sales tax charged on more online purchases after the Supreme Court loosened restrictions on states' ability to require retailers to charge the tax.

A 5 to 4 ruling from the Supreme Court will change that, but Kevin McCarthy with the Arizona Tax Research Association says the impact won't immediately be felt in Arizona. The retail industry is changing, and the Supreme Court has acted correctly in recognizing that it's time for outdated sales tax policies to change as well. "Today's landmark decision is a win for South Dakota and for Main Street businesses across America that will now have a level playing field and tax fairness".

In addition to being a win for states, the ruling is a win for large and small retailers, who argued the physical presence rule was unfair. South Dakota opened the door for states to require online, out-of-state retailers to collect sales tax on their behalf.

Amber Sander, owner of Boots and Heels in downtown Fargo, is hoping this decision will lead to a positive future for her business as well as North Dakota.

Now that Amazon's distribution network spans the country, it collects sales tax nationwide, though it doesn't collect on behalf of third-party sellers.

South Dakota wanted out-of-state retailers to begin collecting the tax and sued several of them:, electronics retailer Newegg and home goods company Wayfair. Avalara helps companies around the world comply with sales tax laws using automation software.



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