Trump praises Supreme Court ruling in internet sales tax case

Doris Richards
June 23, 2018

The law requires out-of-state sellers who do more than $100,000 of business in the state or more than 200 transactions annually with state residents to collect sales tax and send it to the state.

Ron Wyden, the top Democrat on the Senate Finance Committee, said he'll do everything he can to stop what he described a "catastrophic decision". That's where an order late in the year could immediately implement the sales tax.

Take the scenario where a guy from New York City buys a bike online from an OR company.

Nellen said it's also possible Congress will step in and "tone down" the ruling, or "require states to do something to make it easier". But now he does.

The burden will fall disproportionately on small businesses.

But Josh Lehner, an economist with the state of OR, doesn't think the ruling is going to cause dramatic changes. "This ruling clears the way for a fair and level playing field where all retailers compete under the same sales tax rules whether they sell merchandise online, in-store or both". That's because Amazon and NY have negotiated an agreement to include sales taxes.

The high court called the 1992 decision limiting states' ability to tax online retailers "unsound and incorrect".

The ruling is a victory for big chains with a presence in many states, since they usually collect sales tax on online purchases already. "It's just now it's going to be universal".

A resolution of the "antiquated sales tax rules" was overdue given their impact on competition in the rapidly changing retail landscape, according to Laura Strange, vice president of industry relations, communications and marketing at the National Grocers Association. That's because some things just don't sell successfully online, like gas for your auto.

On June 4, the last day of the special second session, Louisiana legislators rushed through a bill that used the same wording as a South Dakota law that was the subject to the constitutional challenge in the high court. Under that ruling, Quill Corp vs.


FMI's Harig said, "We look forward to working with the states and Congress as they seek to outline the terms under which states can collect these taxes". They only had to collect it when shipping the product to a state where the company had a physical presence - like a store or warehouse.

Customers were then meant to pay the sales tax themselves. But the vast majority of shoppers didn't follow through.

This new lawsuit was brought by South Dakota, which has no income tax and therefore is heavily dependent upon sales taxes.

The case is South Dakota v. Wayfair, 17-494.

"Will states step forward and pass laws similar to South Dakota?" asked Annette Nellen, director of the Masters in Science in Taxation program at San Jose State University, on Thursday.

That's a big issue, considering that e-commerce sales in the USA were $435.5 billion past year, vs. $180 billion in mail-order sales in 1992 when the court issued its first ruling on interstate sales and taxes. He was joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel A. Alito Jr. and Neil M. Gorsuch.

Some retailers argued it's unreasonable to expect businesses to monitor and comply with sales tax regulations in parts of the country where they have customers, but no operations.

Justice Anthony Kennedy wrote that the previous decisions were flawed. Sellers who use eBay and Etsy, which provide platforms for smaller sellers, also haven't been collecting sales tax nationwide.

"This is a big win for states", he said. "CCIA has serious concerns about the future implications for e-commerce if governments are empowered to tax those who reside beyond their borders".

Other reports by Iphone Fresh

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