A Supreme Court Ruling Could Make Your Online Purchases More Expensive

A Supreme Court Ruling Could Make Your Online Purchases More Expensive

"You've got to have a modern sales tax, so we don't have to have any other kind of tax that people don't want", Calabro said.

South Carolina's main retail association said the state could collect an added $250 million a year in tax revenue - money from S.C. shoppers that could be used to hire school resource officers, retain teachers or fill vacancies at understaffed state agencies.

Under South Dakota's law, online retailers with more than $100,000 in annual sales or more than 200 transactions in the state are required to pay a 4.5 percent sales tax on all purchases. Instead, consumers themselves were expected to voluntarily submit the required taxes-and many did not.

Some small businesses worry that their online sales will become overly complex if they have to collect sales taxes for many states. The ruling came on a 5-4 majority decision with Justices Anthony Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch voting in favor, with John Roberts voting against along with Stephen Breyer, Sonia Sotomayor and Elena Kagan.

In Florida, the sales tax has been applied to a wider range of internet sales over the last few years.

The biggest impact on Amazon will actually be on the third-party Amazon Marketplace, which makes up around half of Amazon's sales. That position was to target huge retailers, without hitting smaller shops who sell their wares through eBay and Amazon. Three large online vendors, Wayfair, Newegg, and Overstock, challenged the law in court, and lost on Thursday. Today, the retail giant collects taxes in every state that has a sales tax.

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By one government estimate, states can stand to reap between $8 billion and $13 billion in new revenue.

Governor Pete Ricketts reacted to the ruling.

Amazon.com entered into an agreement with the state of Oklahoma to collect and remit sales taxes beginning in 2017. Prior to the ruling, sellers were responsible for collecting sales taxes if they had a presence in the state. That's a question on many minds after Thursday's Supreme Court ruling in South Dakota v Wayfair (see EcommerceBytes' article, "Supreme Court Throws Out Longstanding Sales Tax Rule-Book", published on Saturday). Then in 2000, a national commission urged states to simplify their tax systems as a precursor to taxing remote sellers.

"The Court's decision provides no hard-and-fast rules for states to follow", says Carl Davis, research director at the Institute on Taxation and Economic Policy, in Washington, D.C. "There is a chance here that it raises prices for consumers by passing on this tax increase".

"The taxpayers of Florida really rely heavily on the sales tax". Shares in large chains with more stores traded higher.

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