Commerce Stocks Smacked By Supreme Court Ruling On State Taxes

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This ruling signals how much the internet has matured. "This makes online sales more a function of loyalty and preferences than pricing, which highly favors Amazon". They instead suggested that Congress should pass legislation simplifying online sales tax to create a level playing field.

Although in the past Americans may have purchased online to avoid paying sales tax, they are increasingly shopping online to get items quickly and without having to leave the house, retail experts say. Instead, consumers were responsible for send states the necessary taxes - something that most people never do.

Unsurprisingly, consumer rights advocates aren't especially pleased with the ruling.

The state Senate passed a bill previous year similar to the South Dakota law that the Supreme Court upheld. Local governments may also see a windfall as a result of the ruling, since the government estimates that between $9 billion and $13 billion in potential tax revenue is left on the table, thanks to earlier Supreme Court decisions on the taxation of online purchases.

Washington was one of 41 states and the District of Columbia that joined the case supporting South Dakota.

For Amazon, the loyalty of its Amazon Prime subscribers, who pay monthly or yearly fees for shipping discounts, could soften the blow of tax collection, said Charlie O'Shea, a retail analyst at Moody's.

That's what eBay has long advocated. Third-party merchants account for about half of Amazon's total online sales. Now, under this new decision, even if a company doesn't have a store, warehouse, or office in a state, its internet sales to that state's residents can be taxed.

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"E-commerce has shown us over the last 10 years, most of those issues are, by and large, solved".

South Dakota's case was supported by 35 states and the federal government and saw the Supreme Court undo a 1992 ruling in which it had held that the mail-order company Quill did not have to collect sales taxes in North Dakota.

The Supreme Court on Thursday ruled that states can collect sales tax from all retailers, even if those retailers do not have a "physical presence" in their state - ultimately paving the way for states to collect sales tax from online retailers.

Justices Anthony Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito, and Neil Gorsuch delivered the opinion while John Roberts, Stephen Breyer, Sonja Sotomayor, and Elena Kagan dissented.

"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", he wrote.

Gary Herbert is praising a ruling by the U.S. Supreme Court on sales tax collection from online purchases. "But once that happens, Trump Store and other internet retailers are going to have to start collecting sales taxes in states where they do a meaningful amount of business".