Supreme Court rules that states can collect internet sales tax on online retail purchases

[techbeck]

The US Supreme Court has overturned a tax-related ruling from 1992, freeing state and local governments to collect billions in internet sales tax, as reported by Bloomberg. The 1992 ruling from Quill v. North Dakota, focused on mail-order and catalog purchases, requiring that a business must have a physical presence within a state in order for the state to collect sales tax.

 

The 5-4 vote overturned this ruling, citing companies like Newegg, Wayfair, and Overstock in the Supreme Court decision, stating that “each easily meets the minimum sales or transactions requirement of the Act, but none collects South Dakota sales tax.” Amazon began voluntarily collecting taxes in the 45 states that require it last year, but only on items from its own inventory, meaning sellers on Amazon Marketplace may be impacted by this ruling.

 

Writing for the court, Justice Anthony Kennedy said the 1992 decision was “unsound” and obsolete in the e-commerce era. As a result of this new ruling, internet retailers can be requited to collect sales tax in states where they have no physical presence. Estimates say that this broader taxing power will now let state and local governments reap an additional $8 billion to $23 billion a year in revenue.

 

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https://www.theverge.com/2018/6/21/17488546/internet-sales-tax-supreme-court-online-retail-purchases-states-collect