USA court backs states over web sales tax

21 June, 2018, 19:56 | Author: Sergio Cook
  • Supreme Court rules states can force online shoppers to pay sales tax

The Supreme Court of the United States ruled Thursday that online retailers can add state tax to their sales, even if they do not have a physical location in that state.

The decision overturns a 1992 ruling that prevented the practice.

Shares of Amazon and other online retailers fell Thursday morning after the Supreme Court ruled that individual states can require tax collection on digital sales.

The 5-4 ruling strikes down a decades-old decision that impacted online sales; clearing the path for local governments to charge sales tax on goods regardless of whether or not the business has a "physical" footprint within its boundaries. Part of the draw to buying things online, aside from the convenience, was avoiding sales tax (assuming you bought from a smaller merchant), which on more expensive products could cost more than shipping - that's not to mention the possibility of free shipping in some cases, too.

The decision ends years of work by the retail industry "to reverse a pre-internet era rule that distorts free markets and puts local brick and mortar stores at a competitive disadvantage with their online-only counterparts", said Deborah White, general counsel for the Retail Industry Leaders Association.

Andrew Moylan, executive vice president of the National Taxpayers Union Foundation, said the Court dealt a blow to taxpayers and is allowing states the power to tax businesses all over the country. Chief Justice John Roberts dissented along with Stephen Breyer, Sonia Sotomayor, and Elena Kagan.

The Best Tweets Responding to Homeland Security Secretary Kirstjen Nielsen's Lies. Period
As a result, the Department of Homeland Security has published a supposed fact check of its family separation policy . On Monday, speaking to the nation's sheriffs at a gathering in New Orleans, again defended the zero tolerance policy.

Only five states do not have a state-wide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. The company maintains that it has been collecting tax in all 45 states which require it.

In response to the ruling, the stocks of several internet retailers, including Amazon, eBay and Wayfair, all dropped.

The case the court ruled in has to do with a law passed by South Dakota in 2016.

Taxes on TV services is not new.

South Dakota has estimated that it could take in up to $50 million a year in additional revenue with these taxes being collected.

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