Supreme Court Rules States Can Require Sales Tax for Online Purchases

22 June, 2018, 18:46 | Author: Corey Lynch
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Supreme Court decision expanding the ability of states to pull in tax dollars from online purchases could have a significant impact in Florida.

Stocks for several major online retailers dropped in response to the news, including Amazon, Wayfair, and eBay.

Although consumers have in theory always been liable for paying sales tax to their state and municipality for online orders, the reality is very different.

South Dakota then filed a lawsuit to declare that the new law was valid, a suit that eventually found its way to the Supreme Court.

El Paso, TX - The Supreme Court ruled on Thursday that local and state governments can now force online retailers to collect sales tax in states where they do not have an online presence such as a storefront or a warehouse.




The court upheld a 2016 South Dakota law requiring some online merchants - those with more than $100,000 in annual sales to state residents or 200 transactions with state residents - to collect the South Dakota sales tax, which is 4.5 percent. Until now, online retailers with no physical presence in a state were not. The Supreme Court heard arguments in the case in April.

"At this time, the Department is reviewing the ruling and its impact on Florida sales tax", a Revenue spokeswoman said. "This means we should be ready to go".

Small online businesses may be exempt, but just where the line will be drawn is unclear. "This decision finally levels that playing field, and I think that's all any business wants".

"For years, online-only retailers have exploited this loophole that allows them not to collect sales tax, which has given them an unfair competitive advantage over brick-and-mortar stores", said James Miller, a spokesman for the Florida Retail Federation. North Dakota from 1992, which set the property or employees standard for sales taxes using the Court's (debated) dormant commerce clause power to restrict state taxation of interstate commerce. (It dealt primarily with catalog sales.) The state, which argued it lost $50 million a year in sales tax, was supported by independent retailers such as bookstores that are forced to compete with online companies but whose products end up being more expensive because they must charge sales taxes. Here in IN, former Gov. Mitch Daniels' administration agreed not to seek the sales taxes in exchange for Amazon locating several warehouses in the state. Second, the Act ensures that no obligation to remit the sales tax may be applied retroactively. S. B. "We look forward to working with state leaders as they take the necessary actions to ensure that this tax, which has been required under Florida law for decades, is collected moving forward". "For centuries, states have threatened the free flow of interstate commerce by attempting to tax and regulate businesses all across the country, regardless of location".

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