Published: Sun, June 24, 2018
Markets | By Erika Turner

Supreme Court rules that states can collect sales tax from online retailers

Supreme Court rules that states can collect sales tax from online retailers

The exact impact of the ruling on Florida's sales tax collections is unknown but it could be significant.

Quill is a precedent that traditional retailers have sought to overturn for 20 years - because they believe it gives e-commerce sellers an unfair price advantage.

Online shopping sales have grown steadily for the past decade, but when it comes to sales tax, things get tricky.

You may, depending on where you live and what online store you shop at. State Representative Tim Brown (R-Crawfordsville) said only about one percent of people in IN actually paid an online sales tax previous year.

When will I start to see changes?

South Dakota, who brought the challenge to the Supreme Court, passed a law in 2016 that required out-of-state online retailers that make more than $100,000 in sales or 200 transactions annually in that state to pay 4.5 percent tax.

"We are a state, we're most famous for having one of the most complicated and quite frankly, screwed up sales tax systems in the United States", McCarthy said.

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Some states will still have to pass new legislation to demand tax from out-of-state orders, and that isn't always guaranteed. "I think it's overall a positive".

TrumpStore.com now collects sales taxes in just four states. Amazon.com, with its network of warehouses, also collects sales tax in every state that charges it, though third-party sellers who use the site don't have to. That may change as state laws are modified.

Washington, which doesn't tax personal income or capital gains, depends heavily on sales-tax revenues to help fund government services. Some shoppers may not notice, or care, analysts say.

"States struggling with rising health care and pension costs will welcome the additional tax revenue, which in effect represents revenue otherwise lost from brick-and-mortar stores", S&P added. As consumers shifted away from brick and mortar business and took their purchase power online, states lost billions in annual tax revenue.

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Stocks of online retailers were down significantly immediately following the ruling.

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