The Supreme Court says states can force online shoppers to pay sales tax, clearing the way for major changes in the world of e-commerce.
The ruling is a victory for states that said they were losing billions of dollars in revenue every year, and for large retailers that had argued that the physical presence rule meant they were playing by different rules than online-only sellers.
Morris noted the online sales tax case has to go back to a South Dakota court for more decisions before it could affect sales tax collections in any state, including Louisiana. Many big retailers, such as Amazon.com and Macy's, already collected sales tax for online purchases because they had warehouses or stores in those states. "Wayfair has long supported a legislative solution that would establish a level playing field for brick-and-mortar and online retailers by permitting states to collect sales tax on online sales". North Dakota, that said companies can not be forced to collect sales tax from customers in a state where they don't have a physical presence like a store or distribution center. Otherwise, they didn't have to collect the state's sales tax.
"South Dakota's tax system includes several features that appear created to prevent discrimination against or undue burdens upon interstate commerce", Kennedy wrote.
Still, the ruling was a central topic of discussion Thursday in the House, where lawmakers in a special session are haggling over sales tax measures aimed at lessening steep budget cuts that hit in July. President Donald Trump, who has bashed online retail powerhouse Amazon.com Inc and whose administration backed South Dakota, said on Twitter. Marketplace sales make up as much as one-third of Amazon's revenue, by some estimates.
They will have to examine and retrofit operations to determine where they have to collect tax, whether their goods are taxable, and how they will handle tax computation, filing, and remittance, consultants said. That may change as state laws are modified.
Kennedy didn't directly decide whether states could try to collect taxes retroactively, but he said that issue wasn't a reason to keep the physical-presence rule.
Roberts said the decision should be left to Congress, as they have "more flexibility" to address the issue. Justice Roberts penned the dissenting opinion and was joined by three other justices: Breyer, Sotomayor and Kagan. North Dakota (1992) - was both "unsound and incorrect".
"The burden will fall disproportionately on small businesses".
And one of the biggest winners from that ruling, maybe ironically, could be Amazon, said Tom Forte, managing director at research firm D.A. Davidson. More than 20 states define a seller's physical presence as including any affiliated website.
FILE PHOTO: The U.S. Supreme Court is seen after the court revived Ohio's contentious policy of purging infrequent voters from its registration rolls, overturning a lower court ruling that Ohio's policy violated the National Voter Registration Act, in Washington, U.S., June 11, 2018.
The case is South Dakota v. Wayfair, 17-494.