Supreme Court says states can require online retailers to collect sales tax


"It certainly clears up any confusion, clears up some of the rhetoric", said Rep. Jay Kaufman, D-Lexington, chairman of the Committee on Revenue.

"[.We] are prepared to comply with any outcome, and the decision will have no appreciable impact on our business [.] Today the U.S. Supreme Court has re-shaped the interstate commerce landscape in a move that could impact small business innovation on the internet, which has been a driving force behind our nation's economy for the last 15 years". Because many e-commerce companies do not collect state sales taxes on purchases, they have had an advantage over brick-and-mortar businesses that do collect it.

Nebraska Tax Commissioner Tony Fulton said Thursday morning that officials were still reading the court opinion and could not comment on how it might affect the state. "It's a drain on our economy and a drain on our main streets and our local sellers", said Jon Hurst, president of the Retailers Association of MA. It was your responsibility to pay sales tax on your untaxed online purchases at the end of the year, but virtually no one did that.

The court ruled that businesses can be required to collect sales taxes even when they don't have a physical presence, such as a warehouse or office, in the state where the purchase is made.

Worse still, the rule produces an incentive to avoid physical presence in multiple States.

Hartman said the decision is a win for both the state and for businesses who have a presence here.

While some online sellers recently have started collecting sales taxes, others, like L.L. Bean, do not. The results were published in the April 1 issue of BRAIN.

"E-commerce has grown into a significant and vibrant part of our national economy against the backdrop of established rules, including the physical-presence rule", the dissenting opinion read.

OH has been known to try to collect excise taxes on cigars in the past, but most states, similar to the sales tax issue, have avoided going after consumers for missing taxes on online purchases.

Other states will be doing the same thing and software and tax collection services will be gearing up. That led to the legal challenge of Quill Corporation v.

It was inevitable that the law would eventually be overturned and in many respects the law that led to this Supreme Court decision was specifically created to bring about that change.

Attorneys for Crutchfield Corporation could not immediately be reached. Typically states would focus their efforts on online vendors and not the customers, but with today's ruling, it becomes moot. "When you're talking about this kind of revenue potential", she says, "I'd say that's definitely reason for legislatures to want to call a special session".

When the internet was in its infancy, online retailers such as Amazon took advantage of tax laws - which hadn't yet caught up with technology - to offer low prices online.

"The decision is good for MA and good for states across the country both because it could help to level the playing field between in-state retailers and online retailers and because it will provide revenue for important services in the state, like education and local aid", Berger said.

The group described the decision as a "body blow" to customers and small online businesses. Some Marketplace sellers have contracted with Amazon to collect sales taxes for them.

"Correctly calculating and remitting sales taxes on all e-commerce sales will likely prove baffling for many retailers", he wrote.

But it's undeniable that sales taxes represent a key source of revenue for state governments starved for funding. Now, rivals will be charging sales tax where they hadn't before.