U.S. court backs states over web sales tax

U.S. court backs states over web sales tax

U.S. court backs states over web sales tax

Big Apple online shoppers were technically supposed to pay the sales tax themselves if a retailer did not collect it.

And for local brick and mortar stores, the ruling represents a level playing field. But after the court ruling, most others will be required to collect them. "Over 10,000 jurisdictions levy sales taxes". He was joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel A. Alito Jr. and Neil M. Gorsuch. That led Daniels to announce a new deal with Amazon to start collecting the sales tax on purchases in 2014. Note that consumers who live in one of the five states without a sales tax...

"The physical presence rule has always been criticized as giving out-of-state sellers an advantage", the ruling says. Recently that has been expanding with States pushing to get sales taxes on sales even when the company does not have a physical presence in that area. "Technology has also allowed for compliance with state tax laws to become a lot easier too", said Tax Commissioner Ryan Rauschenberger.

Now that Amazon's distribution network spans the country, it collects sales tax nationwide, though it doesn't collect on behalf of third-party sellers.

"The decision leaves e-commerce and especially small sellers extremely vulnerable to states gluttonous for tax revenue particularly from consumers and businesses with no representation in their state", said Tom Giovanetti, president of the Institute for Policy Innovation. And it sued Wayfair, Overstock.com and Newegg, which won in lower court decisions.

Large online retailers, like Amazon, tend to collect sales tax in most states, but not all. Local governments may also see a windfall as a result of the ruling, since the government estimates that between $9 billion and $13 billion in potential tax revenue is left on the table, thanks to earlier Supreme Court decisions on the taxation of online purchases.

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

"The question is, how much have we already gotten to?" said David Schumacher, director of the state Office of Financial Management.

Two popular companies named in the Supreme Court decision - home-goods retailer Overstock.com and electronics merchant Newegg.com - now collect no NY sales tax because they have no physical offices here.

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. The law requires out-of-state sellers who do more than $100,000 of business in the state or more than 200 transactions annually with state residents to collect sales tax and send it to the state.

The case is South Dakota v. Wayfair, 17-494.

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