Published: Thu, June 21, 2018
Hi-Tech | By Wayne Curry

States can now force you to pay online sales tax

States can now force you to pay online sales tax

The decision settles a long dispute over the taxing authority of states in the internet age.

Online shoppers could find costs going up after the Supreme Court did away Thursday with a decades-old precedent limiting the ability of states to collect sales tax on certain out-of-state Internet purchases. "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.'" .

Customers were generally supposed to pay the tax to the state themselves if they don't get charged it, but the vast majority didn't.

Conservative Chief Justice John G. Roberts Jr. led the dissent, joined by three Democratic-appointed justices.

While the ruling opens the door for states to collect taxes from online businesses, there're some significant outstanding questions now that the court has made its decision. The share of overall retail purchases online has been steadily rising nearly a percentage point every year since 2010 - maybe this shift will actually help the "buy local" movement balance out the online boom.

South Dakota was backed by President Donald Trump's administration in the case.

The case originated from a lawsuit that the state of South Dakota had filed against four online retailers, including the online furniture retailer Wayfair.

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The decision will also have dramatic consequences for small online retailers that do business in many states. But the resulting legislative fallout could have an impact.

But sellers that only have a physical presence in a single state or a few states could avoid charging customers sales tax when they're shipping to addresses outside those states. Sellers who use eBay and Etsy, which provide platforms for smaller sellers, also aren't required to collect sales tax nationwide.

That's not a Supreme Court lineup you see very often.

Forty-five states rely on sales taxes for revenue, and for those states that have no income tax, sales taxes are very important. The company maintains that it has been collecting tax in all 45 states which require it.

Rep. Suzan DelBene (D-WA) cheered the ruling in a statement.

But the high court said it was time to overturn those cases. "It is unfair and unjust to those competitors, both local and out of state, who must remit the tax; to the consumers who pay the tax; and to the states that seek fair enforcement of the sales tax".

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