The 5-4 ruling is a win for states who say are missing out on billions of dollars a year from online sales tax. The court's decision says states can force companies to collect sales tax for online sales. Amazon collects sales tax from customers in the 45 states that have a sales tax.
Beginning in 2014, as part of a compromise, Tennessee started collecting sales tax from online Amazon purchases because the behemoth online retailer had a physical presence in state with warehouses and distribution centers in Chattanooga, Lebanon and Murfreesboro. It's been a long-running issue for Utah, which has claimed a loss of more than $200 million in sales tax revenue from online purchases by consumers.
Previous Supreme Court decisions prevented states from collecting sales tax from out-of-state retailers with no physical presence in the state because the court concluded that would be an unfair burden on interstate commerce. The court noted that the law had three features created to prevent discrimination against or undue burdens upon interstate commerce: it had a safe harbor for those transacting limited business in the state; it was not retroactive; and the state was a member of the Streamlined Sales and Use Tax Agreement, which has been adopted by more than 20 states to standardize taxes to reduce administrative and compliance costs.
Bridgett Lambert, the executive director of the West Virginia Retailers Association, said she was not sure if Justice understands the impact of the ruling.
"So many of us who sell on platforms like Etsy are juggling all the time, families and businesses, or potential businesses along with day jobs", says von Braun, whose Etsy shop sells original artwork.
The conservative chief justice, John Roberts, dissented along with liberal Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan. The ruling should also eliminate the need for the kind of workarounds that MA regulators have recently devised to snare more online vendors, such as arguing that Internet "cookies" constituted a physical presence, a policy Kennedy cited as he dispensed with the physical-presence test. The use tax Many states have a use tax equivalent to the sales tax that applies to online purchases but most online businesses do not comply with it.
Internet companies opposed to the South Dakota law appealed. But it's also "much bigger than that", Jackley said. Amazon.com and Overstock.com are among the companies that say they support a nationwide law that would relieve retailers from dealing with a patchwork of state tax laws.
Owners who have never collected out-of-state sales tax will need to get up to speed.
"It's great to have an even playing field for business and not only that, but sales tax is really important to our communities and important to our state". In that case, Quill v. North Dakota, deciding that companies should charge sales tax even in states where they have no physical location. "With our state's growing economy, I don't want to reach into West Virginians' pockets when we don't need to", he said.