Fairness cited in support of online sales tax decision

Supreme Court of the United States

Supreme Court of the United States

Internet retailers say they are especially anxious tax collectors will try to impose years of retroactive liability, which the laws of many states allow.

Thursday's ruling reversed decisions that states said cost them billions of dollars in lost revenue annually.

He said this ruling from the Supreme Court should not affect their customers much, if any. The internet has changed retailing, and Justice Anthony Kennedy, who wrote the new decision, said, "each year, the physical presence rule becomes further removed from economic reality".

Consumers can expect to see sales tax charged on more online purchases, likely over the next year and before the Christmas shopping season. "Given the burgeoning presence of online, you can no longer treat this as being anything other than the mainstream swim of retail sales".

South Dakota's court system still has to uphold the law before e-commerce companies will have to begin collecting the taxes. The SSUTA's principles promote simplicity and uniformity in state sales and use tax administration and compliance.

Last week, the Supreme Court reversed course. Taxes collected are then remitted to the state, instead of individual merchants trying to remit partial payments to each different locality around the country.

Currently, only five states don't collect state sales taxes Alaska, Delaware, Montana, New Hampshire, and Oregon.County and/or municipal sales taxes are allowed by 38 states, including Alaska and Montana. This means that sellers who engage in the required volume or number of transactions with customers in states with sales and use taxes, will likely be required to register, collect and remit taxes in those states in the near future.

Third, if taxes are the price people pay for government goods and services, the bulk of the costs associated with a sale are associated with the seller's jurisdiction, not the buyer's. Rather, it's a more efficient way of enforcing existing tax laws.

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Nevertheless, the court stopped short of giving its full blessing to the South Dakota law, stating that the taxpayers had made other challenges to the law and those need to be addressed by the state courts first.

In a statement, the Outdoor Industry Association (OIA) said the Supreme Court's ruling that states may collect sales tax on remote internet sales "helps level the playing field for specialty outdoor retailers". The South Dakota Supreme Court invalidated the law because Quill Corp. v.

The Supreme Court judges agreed that the South Dakota sales tax law is lawful and discussed whether an out-of-state seller can be held responsible for the payment of sales tax under the Commerce Clause of the United States Constitution, which was created to prevent states from engaging in economic discrimination. Kennedy wrote that the rule "limited States' ability to seek long-term prosperity and has prevented market participants from competing on an even playing field".

As Justice John Roberts argued in his dissent, "The burden will fall disproportionately on small businesses".

"When people find things in our store that they can't find in their own market, they order from us, and they pay the in sales tax", Siebert said. As a result, remote sellers (e-commerce and otherwise) should be prudent in analyzing and assessing the risk of taxation and implementing procedures created to minimize future state sales and use tax exposure.

As for the argument about the impact on smaller online merchants, Shearman said mom-and-pop stores are the ones that have been disadvantaged in the 26 years since Quill.

‘We welcome the additional clarity provided by the Courts decision today.

The Court held that a physical presence was no longer necessary to satisfy the substantial nexus requirement, casting its prior holding in Quill as "flawed on its own terms" and the physical presence rule as "artificial in its entirety".

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