Share

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

An analysis by Barclays found that Louisiana would get an estimated 3 percent bump in total tax receipts if it begins forcing out-of-state online retailers to collect sales taxes.

“It certainly clears up any confusion, clears up some of the rhetoric”, said Rep. Jay Kaufman, D-Lexington, chairman of the Committee on Revenue.

The Supreme Court ruled 5-4 in favor of South Dakota.

Some online retailers have already been collecting some state taxes. Many have argued the status quo left those businesses at a disadvantage since many online retailers could offer lower prices without the sales tax tacked on. “It’s a drain on our economy and a drain on our main streets and our local sellers”, said Jon Hurst, president of the Retailers Association of MA.

“Sometimes it’s just more convenient for people to do it online, but it really just depends what you are looking for”, said Karen Herzog, Sales Clerk at Opus in Greenfield. “SC already collects (sales tax) on 22 of the top 25 e-retailers”.

A new U.S. Supreme Court ruling Thursday appears to have wiped away those questions and validated the new de-facto requirement for many online retailers to charge Washingtonians sales taxes as they hadn’t before.

“At this time, the Department is reviewing the ruling and its impact on Florida sales tax”, a Revenue spokeswoman said.

IN lawmakers anticipated the ruling in 2017 when they passed a law that imposed sales tax on companies that did at least $100,000 worth of business or more than 200 separate transactions in the state in a year. North Dakota reaffirmed that out-of-state vendors did not have to collect sales taxes.

South Dakota Gov. Dennis Daugaard called Thursday’s decision a “Great Day for South Dakota”, though the high court stopped short of greenlighting the state’s law.

One potential problem: Some local stores have expanded into the realm of online shipping, and they’ll now have to figure out how to navigate their customers’ local and state tax codes in 50 different states. And, retailers say it cost jobs and hurt local economies. Alaska, Del., Mont., N.H. and Ore…won’t be affected by the Supreme Court’s ruling.

Attorneys for Crutchfield Corporation could not immediately be reached.

The decision could generate “hundreds of millions of dollars” in new revenue for NY state, according to Joseph Bishop-Henchman, vice president of the Tax Foundation think tank. But it’s also “much bigger than that”, Jackley said. The court action goes a long ways to help level the playing field for those small businesses, she added. When Quill was decided, “the court could not have envisioned a world in which the world’s largest retailer would be a remote seller”, namely, Amazon, Kennedy said.

Well, as frugal shoppers in the neighboring states well know, New Hampshire is one of five states in country with no statewide sales tax. He argued that the court should not regulate e-commerce. “Technology has come to aid of retailers”, he said.

Advertisement

Amazon has always been the “poster child” for this problem/opportunity as they have been the dominant online-only retailer for some time. “Whereas mom and pop brick and mortar businesses were”, Lesser said.

Supreme Court decides online sales tax issue