Supreme Court Decides Wayfair Online Sales Tax Case

UPROXX  Shutterstock

UPROXX Shutterstock

Online sellers that haven't been charging sales tax on goods shipped to every state range from Overstock.com, electronics retailer Newegg and jewelry website Blue Nile to pet products site Chewy.com and clothier L.L. Bean.

A level playing field is what North Dakota businesses wanted with their online competitors. That has long meant cheaper online purchases with no sales tax to pay, especially on big-ticket items. Amazon collects state sales tax on items it sells directly, but third party vendors on Amazon are now not required to collect the tax.

Justice Anthony M. Kennedy, who wrote the majority decision, said the previous ruling unfairly disadvantaged traditional brick-and-mortar stores.

But sellers that only have a physical presence in a single state or a few states could avoid charging customers sales tax when they're shipping to addresses outside those states.

But Karr said he wasn't concerned about challenges complying with new regulations that might not be consistent state to state.

The suit (South Dakota v. Wayfair) was brought by 40 states that claim the old rule had cost them billions in lost tax revenue. Third-party merchants account for about half of Amazon's total online sales.

"Today's decision promises to subject small businesses reliant on e-commerce to new and burdensome tax obligations in states across the nation", said Ed Black, president of the Computer & Communications Industry Association, in a statement Thursday.

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One utterly distressed Salvadoran girl, which ProPublica said was all of six, can be heard begging authorities to call her aunt. McCain tweeted Monday night that the administration has the power to rescind this policy and "should do so now".

Today's ruling by the Supreme Court has many consumers wondering: Am I going to start paying more in taxes to shop online? States were missing out on around 25 percent of the tax from online sales, according to the Government Accountability Office, meaning $13 billion in missed sales. "Each year, it becomes further removed from economic reality and results in significant revenue losses to the States".

But even with the court's decision, not all remote sales are likely to be taxed.

Sellers that use eBay and Etsy, which provide platforms for smaller sellers, also haven't been collecting sales tax nationwide.

Retailers with many bricks-and-mortar locations, or larger online retailers with large networks of distribution centers, argued the exemption for companies without a physical location gave online competitors who didn't have to collect taxes an unfair advantage.

Davids said if he is back next session as House tax leader - state House representatives are up for election in November - he will try to lower taxes so overall there is no tax increase. The case is South Dakota v. Wayfair.

The case, which we first told you about in April, was over a South Dakota law which requires retailers, regardless of where they are, to collect and pay sales tax. The conservative chief justice, John Roberts, dissented along with liberals Stephen Breyer, Sonia Sotomayor and Elena Kagan.

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