Supreme Court closes online sales tax loophole

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Jeanne Shaheen said in a statement. Still, almost half of Amazon's sales are through these other merchants, which could surely impact business.

Amazon has already been charging sales tax in 45 states.

"This is neither the first, nor the second, but the third time this court has been asked whether a state may obligate sellers with no physical presence within its borders to collect tax on sales to residents", Roberts wrote. Newly-public sales tax automation company Avalara saw its shares spike 30 percent immediately following the ruling. That's unfair, she said, to the business owners and community.

In a case called South Dakota v. Wayfair (.pdf), the US Supreme Court today overruled a 1992 decision, Quill v. Heitkamp, that prevented states from requiring online retailers to collect sales tax when there was no physical business presence in the state.

"This ruling clears the way (for) all retailers to compete under the same sales tax rules whether they sell merchandise online, in-store or both", said National Retail Federation president and CEO Matthew Shay.

The burden will fall disproportionately on small businesses.

The bill, which was signed into law by Gov. John Bel Edwards, positions Louisiana to take advantage of the ruling and start requiring internet retailers to collect sales taxes. Wayfair, Amazon.com, Overstock, Etsy, Shopify, and Blue Apron were all down in the 30 minutes following the ruling, with Wayfair falling as much as 9.5 percent. Amazon was among the biggest drags on the benchmark S&P 500 stock index.

Two popular companies named in the Supreme Court decision - home-goods retailer Overstock.com and electronics merchant Newegg.com - now collect no NY sales tax because they have no physical offices here.

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The Georgia General Assembly enacted the state law this year, in anticipation of the Supreme Court's decision. Sen.

In recent years, brick-and-mortar retailers, including bike retailers, had supported federal legislation that would create a nationwide system to collect state taxes.

And according to the Supreme Court case, some large online retailers do not collect taxes on their remote sales.

"Consumers will quickly feel the negative effects as those businesses dry up or are forced into the arms of Internet giants", he added.

The Trump administration backed South Dakota in the case, arguing that no one could have foreseen how rapidly e-commerce would expand. For example, the popular electronics seller B&H only charges sales tax in NY and New Jersey, where it has a physical presence. "If you're buying online from Walmart or Target, you're still paying sales taxes".

More than 40 states had submitted testimony in favor of upholding the South Dakota law. "States are already confronting the complexities of defining physical presence in the Cyber Age", he wrote. North Dakota, the 1992 ruling that previously made it illegal.

In the digital era, the costs of complying with different tax regimes "are largely unrelated to whether a company happens to have a physical presence in a state", Kennedy wrote.

The US Supreme Court ruled Thursday that American states had the right to tax internet sales of goods and services.

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