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The Supreme Court just caused stocks of online retailers to tumble

22 June, 2018, 18:43 | Author: Sara Gill
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"Attempts to apply the physical presence rule to online retail sales are proving unworkable".

On Thursday the Supreme Court reversed more than half of a century of precedent. But, if a business did not have a physical location in a state, it nearly certainly did not charge sales tax in that particular states. Now, some companies had, like Amazon had been remitting the sales tax to us already on internet sales. "It's exciting to have it overturned, but it's disappointing to not have a law in place".

The suit (South Dakota v. Wayfair) was brought by 40 states that claim the old rule had cost them billions in lost tax revenue.

Gov. Pete Ricketts was among those opponents, although he had been seeking a compromise at the time the bill failed.

After states and traditional retailers have grumbled about this situation for years, South Dakota finally chose to do something to change it.

Oklahoma sales tax collections should make a significant jump thanks to a decision issued Thursday by the U.S. Supreme Court.

"There are nuances to every opinion", he said.

"The taxpayers of Florida really rely heavily on the sales tax".

In recent years, brick-and-mortar retailers, including bike retailers, had supported federal legislation that would create a nationwide system to collect state taxes. Instead, consumers were responsible for send states the necessary taxes - something that most people never do. Justices Ruth Bader Ginsburg, Clarence Thomas, Samuel Alito and Neil Gorsuch joined his opinion. North Dakota, which forbade states from interfering with interstate commerce by taxing companies that don't have a physical presence within their boundaries.


"CEO Matthew Shay said in a statement Thursday that the ruling clears the way for "a fair and level playing field where all retailers compete under the same sales tax rules" no matter whether they operate online, in stores or both". That's because they typically have a physical store in whatever state the purchase is being shipped to. Amazon actually already charges sales taxes on the goods that it sells directly.

Hearst said MA shoppers who want to avoid paying a state sales tax, travel to New Hampshire.

Although consumers have in theory always been liable for paying sales tax to their state and municipality for online orders, the reality is very different.

The ruling is likely to lead other states to try to collect sales tax on purchases from out-of-state online businesses more aggressively.

But note that the Court only says that the South Dakota law is OK for South Dakota, without defining what "OK" means for all the other states.

Thanks to a 1967 Supreme Court ruling, states have only been allowed to collect sales tax on a purchase made when the retailer has a physical presence within that state.

The Supreme Court review of the Wayfair Inc. case ignited debate and posturing past year.

South Dakota was backed by President Donald Trump's administration in the case. The case is South Dakota v. Wayfair.

The report includes material from the Associated Press.

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