In Wayfair, SCOTUS leaves work for state courts

Lloyd Doyle
June 22, 2018

In making their decision, justices ruled that South Dakota can collect sales taxes from online retailers like Wayfair, which was sued by the state.

Strategic Resource Group's Burt Flickinger on the Supreme Court ruling that states can collect sales tax on out-of-state purchases.

Later Thursday, Indiana officials reacted to the decision, with both Gov. Eric Holcomb and the Indiana Chamber of Commerce voicing their approval.

The high court ruled Thursday that states can require retailers to charge sales tax even if the retailer lacks a physical location in the state. "We're taking a careful look at the ruling to better understand its implications for IN". "Today's Supreme Court decision is an important and overdue update to our system", Herbert spokesman Paul Edwards said in a statement to FOX 13.

That's because lawmakers in Olympia have already moved to expand online sales-tax collections in bits and pieces. She says the court decision will "level the playing field for IL brick-and-mortar retailers".

Chief Justice John Roberts offered the dissenting opinion, along with Justices Stephen Breyer, Elena Kagan, and Sonia Sotomayor. "Here in California, we already pay sales taxes on Amazon transactions". And many other sellers that do not have a physical distribution network in a particular state, such as Overstock.com, do not collect either.

The ruling, which overturned two decades worth of precedent, gives states wide latitude to implement their own rules about collection.


The Illinois provision mirrors the South Dakota law at the center of the Supreme Court case, and is scheduled to go into effect on October 1.

Collecting taxes on all e-commerce sales "will likely prove baffling for many retailers", Roberts said. He was joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel A. Alito Jr. and Neil M. Gorsuch. (It dealt primarily with catalog sales.) The state, which argued it lost $50 million a year in sales tax, was supported by independent retailers such as bookstores that are forced to compete with online companies but whose products end up being more expensive because they must charge sales taxes.

Currently, more than 230 out-of-state, online vendors are signed up for the Simplified Sellers Use Tax program in Alabama. "Nobody does it, but they actually technically do owe it", said Howard Gleckman of the Tax Policy Institute.

"You've got to have a modern sales tax, so we don't have to have any other kind of tax that people don't want", Calabro said. It ruled that economic activity in a state is a better measure of relevance for purposes of taxation than physical presence. The decisions made it more hard for states to collect sales tax on certain online purchases, and more than 40 states had asked the high court for action.

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.

Wayfair (W), Etsy (ETSY) and eBay (EBAY) all dipped in early trading Thursday immediately following the ruling. He also called it a "Great victory for consumers and retailers", though consumers will ultimately be paying more and businesses weren't uniformly cheering the decision.

Other reports by Iphone Fresh

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