US Online Shopping Is About To Get More Expensive

Virginia Carson
June 22, 2018

This latest Supreme Court ruling said that earlier decision was obsolete in an era of explosive e-commerce.

Smaller sellers who use eBay and Etsy also haven't been collecting sales tax nationwide.

Some popular "e-tailers" already collected at least some state sales tax.

"Florida TaxWatch has championed the collection of sales and use tax from online and remote sellers for more than a decade, and we are proud to be on the right side of this issue".

"As Amazon has continued to thrive despite losing the obvious pricing benefit it used to have from not collecting sales taxes in its proprietary business, it remains to be seen if this new ruling will have any real impact on its third-party sales, or if the convenience for shoppers and growing benefits to Prime members will mitigate the pricing shift", he said.

"It's going to be very hard for New Hampshire-based businesses to comply with this", she said.

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In a 5-4 decision, the court on Thursday upheld a South Dakota law that allows that state to apply its sales tax to major online retailers, even if they had no physical presence in the state.

"This Supreme Court ruling will help level the playing field between our Hoosier-based companies that operate retail stores and out-of-state companies that sell products and services online in our state", Holcomb said in a statement.

Chief Justice John Roberts offered the dissenting opinion, along with Justices Stephen Breyer, Elena Kagan, and Sonia Sotomayor.

States lost out on $17.2 billion in sales tax in 2016 because of these loopholes, reported the National Conference of State Legislatures.

"The burden will fall disproportionately on small businesses", he wrote.

Amazon shares slumped less than 1%. Amazon was among the biggest drags on the benchmark S&P 500 stock index. That was due to an outdated Supreme Court decision on sales tax collection.

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The win was welcomed by groups representing brick-and-mortar retailers and decried by e-commerce advocates.

E-commerce sales in the fourth quarter of 2017 increased to $119 billion, up more than 3% from the previous quarter and almost 17% from a year earlier, according to U.S. Census Bureau data.

"Consumers will quickly feel the negative effects as those businesses dry up or are forced into the arms of Internet giants", he added.

The Trump administration had urged the justices to side with South Dakota. The law could yet face legal challenges on other grounds, Kennedy noted.

Broader taxing power will let state and local governments collect an extra $8 billion to $23 billion a year, according to various estimates. It also likely will lead to many consumers paying more at the online checkout. "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".

"We are a state, we're most famous for having one of the most complicated and quite frankly, screwed up sales tax systems in the United States", McCarthy said. Online sales comprised more than 9% of total sales in the U.S. Until now, online retailers with no physical presence in a state were not. At the time, the ruling was focused on mail-order catalogs, but it has held up even as shopping has transitioned to online instead. South Dakota took that as a prompt to change its state laws, demanding that retailers - whether online or with a physical presence - must collect taxes on their sales to state residents.

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