US Supreme Court Rules States Can Require Online Merchants to Collect Sales Tax--Update
22 June 2018 - 1:06AM
Dow Jones News
By Brent Kendall
The Supreme Court handed states broad authority Thursday to
require online retailers to collect sales taxes, overturning a
pre-Internet court precedent that had effectively exempted many
merchants from collection duties.
The Supreme Court handed states broad authority Thursday to
require online retailers to collect sales taxes, overturning a
pre-Internet court precedent that had effectively exempted many
merchants from collection duties.
The court, in a 5-4 decision written by Justice Anthony Kennedy,
ruled that states can require internet merchants to collect the
taxes even if the merchant has no physical presence in the
state.
The ruling likely will spell the end of an era in which
consumers could save on taxes by purchasing goods online instead of
from local merchants.
The justices' decision overturned a 1992 high court ruling
involving mail-order businesses that said states can only require
tax collection by merchants who are physically located in the
state's borders.
The ruling is a victory for states that argued tax-free internet
sales were costing them billions in revenue. It is also a big win
for brick-and-mortar stores that were competing against online
rivals, who didn't collect the taxes on internet purchases.
Some large online retailers, such as Amazon.com Inc., already
collect state sales tax on products they sell directly, but others
don't. Amazon also hasn't collected the taxes for most independent
merchants who sell items on Amazon's platform.
The case before the high court was brought by the state of South
Dakota, which enacted a law in 2016 that required merchants to
collect the tax. The state then set the stage for test litigation
by suing out-of-state online sellers, including Wayfair Inc.,
Overstock.com Inc. and Newegg Inc.
(More to Come)
(END) Dow Jones Newswires
June 21, 2018 10:51 ET (14:51 GMT)
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