Published: Sun, June 24, 2018
Money | By Armando Alvarado

Supreme Court rules in favor of online sales tax

Supreme Court rules in favor of online sales tax

Shares of Amazon and other online retailers fell Thursday morning after the Supreme Court ruled that individual states can require tax collection on digital sales.

Justice Anthony Kennedy wrote the majority opinion, supported by most of the Court's conservatives and, somewhat surprisingly, Ruth Bader Ginsburg.

It's clear that the court's decision will mean extra cash for states. The Supreme Court decision is seen by many as a start to a solution for both issues. "Any adjustment to those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress", Roberts wrote. "It will take time to pass implementing legislation, and the additional revenue will represent a relatively small portion of overall state and local revenues". The ruling will allow states to collect sales taxes from online retailers. "For years, this situation has resulted in substantial loss of revenue to states, thus increasing the tax burden on those who do pay the taxes they owe". If they are forced to charge sales tax, how will they keep track of the amount they owe each state? Now, rivals will be charging sales tax where they hadn't before. "You've got to have a modern sales tax, so we don't have to have any other kind of tax that people don't want", Calabro said. If you like to sell stuff on the auction website, you should be exempt from this unless you're making six figures from sales.

Sales tax collection previously followed that is commonly known as the physical presence rule.

Reed in contention after 31 on front Sunday at U.S. Open
Open on Saturday after a missed putt on hole 13, when he ran over to the still-rolling ball and jabbed it toward the hole. The USGA pledged to ease off the severe conditions at Shinnecock Hills and, thus far, that has been the case.

Why it matters: States had long complained that they were losing out on billions of dollars in lost tax revenues, and that the old rules failed to recognize the growing importance of the internet economy.

The law calls for a one-tenth percent rate cut per $20 million in new state revenue from purchases through online retailers.

The court added that companies such as Newegg, Wayfair, and Overstock "each easily meets the minimum sales or transactions requirement of the Act, but none collects South Dakota sales tax". Investors in the online retail sector must be fearing a backlash from customers who will now be forced to pay more for their online goods.

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

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