Latest US Supreme Court decision could hit SC wallets. Here's how

Laverne Mann
June 26, 2018

"The Internet's prevalence and power have changed the dynamics of the national economy", the court said in its decision in the case, South Dakota v. Wayfair. South Dakota had passed a bill in 2016 that said online retailers must collect sales tax if they make more than $100,000 worth of sales in their state, or do 200 transactions in their state. Matt bought has a Syracuse gnome thta he bought online, and since the store has no physical presence in Arizona, he didn't have to pay sales tax.

The North Dakota Legislature past year passed a law requiring the collection of sales tax from online retailers, effective whenever the U.S. Supreme Court acted to overturn the Quill decision or made a similar ruling, according to Attorney General Wayne Stenehjem, who joined with South Dakota in pushing to overturn the Supreme Court's 1992 decision.

The decision today opens the door for states to pass new legislation and begin collecting more sales taxes from online sellers.

The Supreme Court's 5-4 decision Thursday overruled a pair of decades-old decisions that states said cost them billions of dollars in lost revenue annually. The decision reversed a 1992 court decision that held that online retailers could only be required to collect and remit sales taxes if they had stores or some other "nexus" in states. "Each year, it becomes further removed from economic reality and results in significant revenue losses to the States".

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Justices Anthony Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito, and Neil Gorsuch delivered the opinion while John Roberts, Stephen Breyer, Sonja Sotomayor, and Elena Kagan dissented.

Amazon, which was not involved in the Supreme Court case, collects sales taxes on direct purchases from its site but does not typically collect taxes for merchandise sold on its platform by third-party vendors, representing about half of total sales. North Dakota, which declared that the Constitution prohibited states from requiring businesses collect sales taxes unless they have a substantial connection to the state they operate in.

We're likely to see this issue addressed legislatively next session. "Second, our small businesses on Main Street are being harmed because of the unlevel playing field created by Quill, where out-of-state remote sellers are given a price advantage". When Amazon opens a fulfillment center in a state, it starts collecting sales tax, noted the report.

Rob Karr, president and CEO of the Illinois Retail Merchants Association, praised the decision, saying it "levels the playing field for bricks-and-mortar stores". Avalara helps companies around the world comply with sales tax laws using automation software.

Other reports by MaliBehiribAe

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