Internet sales-tax ruling could have big effect in Florida

Friday, 22 Jun, 2018

State governments may require online retailers to collect sales taxes even in states where the retailers have no physical presence, the US Supreme Court ruled in a decision issued today.

The South Dakota Supreme Court based its ruling on a 1992 US Supreme Court case, Quill Corp. v.

The decision, which overturns an earlier Supreme Court precedent, will boost state revenues at the expense of consumers and sellers who have avoided sales taxes in the past.

States stand to gain billions of dollars with the ruling, which marks a new era in an Internet economy that has boomed over the past decade and become a dominant force.

Dominic Calabro, president of Florida TaxWatch, a business-oriented advocacy group, said the ability to apply the sales tax to more internet sales will keep the state's tax structure in sync with the evolving economy.

South Dakota challenged this rule. For example, South Dakota, like MA, creates a minimum threshold so only someone doing a large amount of business in the state has to collect taxes. "Its advertising seeks to create an image of attractive, peaceful homes, but it also says that "'[o] ne of the best things about buying through Wayfair is that we do not have to charge sales tax.'" .

"The dominant issues under debate in this case involved policy, not law", the representatives also said.

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Chief Justice John Roberts Jr., who wrote the dissenting opinion, argued that the Supreme Court left this question to Congress in 1992, and Congress has not acted. South Dakota had passed a bill in 2016 that said online retailers must collect sales tax if they make more than $100,000 worth of sales in their state, or do 200 transactions in their state.

Earlier this year, Iowa legislators approved expanding sales tax to digital goods like e-books, subscription services like Netflix, ride-sharing apps like Uber and physical goods purchased online. "Over 10,000 jurisdictions levy sales taxes". Some states that lack a broad sales tax, including New Hampshire, Montana and Washington, had submitted arguments to the court taking the opposite position.

Big Supreme Court win on internet sales tax - about time! Then in 2000, a national commission urged states to simplify their tax systems as a precursor to taxing remote sellers.

He added that the requirement for physical presence amounted to a "judicially created tax shelter" that put online firms at an advantage over their bricks-and-mortar competitors.

But the "Amazon tax" did give other large online retailers a choice: Start collecting sales taxes or pass that responsibility on to customers by filing reports on Colorado residents who spend more than $500 online in the course of a year and warn them they may owe state sales tax.

On Thursday, the Supreme Court agreed to overturn those decisions in a 5-4 ruling. It remains unclear whether Thursday's ruling will prompt them to revise their laws, or encourage the remaining 19 states to impose taxes on retailers even smaller than those affected by South Dakota's law. After the decision was announced, shares in Wayfair and Overstock both fell, with Wayfair down more than 3 percent and Overstock down more than 2 percent. But the tax is not applied to "third-party" sales through the Amazon network. The market mourned the loss of an advantage beyond convenience that e-commerce had over bricks-and-mortar. It was dumb when we were talking about mail-order catalogs in Quill, it's dumb now when we're talking about Wayfair and Amazon.