Supreme Court ruling says states can now tax online purchases

Supreme Court ruling says states can now tax online purchases

Tuesday, the Supreme Court ruled that states can require online retailers to collect sales tax.

It should also help brick-and-mortar retailers, who have suffered for years from uneven competition with online stores that don't have to collect the state's 6.25 percent sales tax.

"If you are a local business that also has an online presence and you have a sale in California or Georgia, you are going to have to invest in a software program or do a lot of bookkeeping because you are going to have to pay sales tax in every state that you ship too".

While a Supreme Court ruling on sales taxes will create more obligations and expenses for many small online retailers, owners are already thinking about how they'll comply.

The Court's decision does not mean the state won't enact various laws to make sure Oklahoma gets its due, Scott said.

Nevertheless, the court stopped short of giving its full blessing to the South Dakota law, stating that the taxpayers had made other challenges to the law and those need to be addressed by the state courts first. Some estimates claim that sales tax avoidance was a great benefit to shopping online - possibly worth $8 billion to $33 billion in uncollected taxes per year.

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In addition to being a win for states, the ruling is a win for large retailers, who argued the physical presence rule was unfair. That essentially shifts more of the tax burden and the responsibility for funding government functions from public education to social services to Floridians who buy locally and away from those who buy online. When a web retailer doesn't collect sales tax, the consumer is supposed to pay a use tax (surprise!), but the compliance rate is notoriously low (no surprise).

"The Supreme Case opens the opportunity for Oklahoma to craft more laws in the future that applies to a broader range of entities that are out of state", she said. He said the court should not be doing the work of Congress, even if its earlier precedents were wrongly decided. Other sellers she's spoken with "are afraid they are going to have to do 50 sales tax returns". Local tax attorneys are now weighing in to break down how this effects small businesses that sell products online, across the world.

Macon online business owner Julie Evans says she wants to see the money stay locally. The court gave South Dakota a victory, knocking aside the physical-presence rule as arbitrary and obsolete in the digital age.

Starting next year shoppers will have to pay sales tax for all online purchases. Congress could also step in and block retroactivity, Jones said.

TrumpStore.com now collects sales taxes in just four states. Amazon.com and Overstock.com are among the companies that say they support a nationwide law that would relieve retailers from dealing with a patchwork of state tax laws. She recalled Thursday that she started looking at this issue in 1992, when the Supreme Court in Quill v. North Dakota, deciding that companies should charge sales tax even in states where they have no physical location. "And it's about time".

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