Supreme Court rules states can collect sales tax for online purchases nationwide

Supreme Court rules states can collect sales tax for online purchases nationwide

Do you agree or disagree with how the Supreme Court ruled in this case?

In 1992, during the era of mail-order catalogs, the Supreme Court ruled it was unconstitutional for states to demand that out-of-state sellers collect and remit sales taxes on all purchases.

South Dakota wanted out-of-state retailers to begin collecting the tax and sued several of them: Overstock.com, electronics retailer Newegg and home goods company Wayfair.

The bill, which was signed into law by Gov. John Bel Edwards, positions Louisiana to take advantage of the ruling and start requiring internet retailers to collect sales taxes.

Supreme Court Justice Anthony M. Kennedy agreed in the majority opinion, finding that 25-year-old rule "prevented market participants from competing on an even playing field". The cases the court overturned said that if a business was shipping a product to a state where it didn't have a physical presence such as a warehouse or office, it didn't have to collect the state's sales tax.

Small online businesses will be the hardest hit, said Chris Cox, a lawyer for e-commerce industry group NetChoice.

Trump slaps China with $50 billion in trade tariffs on imports
Numerous exports are linked to the nation's " Made in China 2025 " plan to lead the world in sectors like AI and robotics. During an impromptu appearance on the White House North Lawn, the president hailed his "very big tariffs " on China.

South Dakota is leading the legal charge, passing a law requiring the collection of sales tax on Internet vendors with at least 200 yearly transactions or $100,000 in sales to its residents. Forty-five of the 50 states impose sales taxes.

"Each year the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the states".

The decision has major implications for online retailers, including Amazon.

After states and traditional retailers have grumbled about this situation for years, South Dakota finally made a decision to do something to change it.

Most states would need to pass legislation before seeking to collect the additional taxes, although some have already enacted laws or regulations similar to South Dakota's.

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