Published: Mon, June 25, 2018
Money | By Armando Alvarado

NRF applauds online sales tax decision

NRF applauds online sales tax decision

The ruling specifically came in response to a South Dakota law that applied only businesses with more than $100,000 in sales, or at least 200 transactions, in the state each year.

"The Court should not act on this important question of current economic policy, exclusively to expiate a mistake it made over 50 years ago", he said. "I think that needs to be part of the discussion is that the potential of these new sales tax dollars could create a situation where we could lower taxes in other areas", Hawk said. Perhaps, Kadlubek could simply limit online sales to residents of New Mexico. The estimates of the amount of sales tax lost to sellers outside of a jurisdiction is from $8 billion to $33 a year according to the Supreme Court decision. Business leaders said that the decision helps "brick and mortar" stores. "We've been operating in a system where we've been at a competitive disadvantage". Kennedy wrote that the unfairness of the tax collection situation also could be an incentive to avoid opening storefronts or distribution centers in states such as Florida, just to avoid collecting the sales tax. "Some of those online state sales (tax) was just coming out of pocket, and I was just paying it to IN". They pay sales tax there.

E-commerce giant Amazon voluntarily agreed in 2017 to start paying New Mexico gross receipts tax, though it is unclear exactly how much the state has collected because tax filings are confidential.

But using the compliance services won't be without complications, says Jamie Yesnowitz, an accountant specializing in state and local taxes with the firm Grant Thornton.

The lineup of justices on each side of the case was unusual, with Roberts joining three more liberal justices and Ginsburg joining her more conservative colleagues.

Large retailers including Apple, Macy's, Target and Walmart, which have brick-and-mortar stores nationwide, generally collect sales tax from their customers who buy online.

Nebraska Gov. Pete Ricketts said his administration is "analyzing" Thursday's U.S. Supreme Court decision about online sales taxes.

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At a local retailer, a consumer is going to pay a six percent tax rate.

In fact, the unfair burden has been on local retailers who have been collecting sales taxes. Because of dramatic fall-offs in state sales taxes, the state in 2016 enacted a law to test the physical presence rule. Allen Walton CEO of SpyGuy.com, an online seller of security equipment complained: "This makes life very hard for people like me". Until that case is resolved, South Dakota has already enjoined itself from enforcing that law on any out-of-state retailers.

Small online businesses will be the hardest hit, said Chris Cox, a lawyer for e-commerce industry group NetChoice. In preparation, state lawmakers included language in this' year's budget bills that would let the legislature move forward quickly in collecting sales tax from more online purchases.

The high court called the 1992 decision limiting states' ability to tax online retailers "unsound and incorrect". This means companies must comply right away or risk an audit and fines from different states. "We want to make sure when we do levy taxes that they're levied in a fair and equitable manner", Blair said.

In a close decision, the Supreme Court on Thursday determined that states can force internet retailers to collect sales taxes from shoppers even in states where they have no physical presence, handing traditional retailers and state governments a major victory.

"The Internet revolution has made Quill's original error all the more egregious and harmful", Justice Anthony Kennedy said in delivering the opinion.

Shares in the online marketplace Etsy fell more than 2% after the decision.

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