Supreme Court Decides Wayfair Online Sales Tax Case

21 June, 2018, 19:52 | Author: Darren Santiago
  • Yuri Gripas  Reuters

Do you agree or disagree with how the Supreme Court ruled in this case?

Thanks to a 1967 Supreme Court ruling that said states couldn't force mail-order catalogs to collect sales tax unless that company had a physical location in the state, online retailers have been able to skirt the issue of collecting sales tax.

Kevin Lyons, spokesman for Texas Comptroller Glenn Hegar, said, "We welcome the court's ruling in this case and are now assessing any potential revenue impacts as a result of this decision as well as whether any rule changes or legislation might be required to achieve the benefits of the decision".

It passed a law requiring retailers with more than $100,000 in annual sales or 200 transactions in the state to pay a 4.5 percent tax. Justices determined that the presence rule was becoming "further removed from economic reality" every year, and that the costs of honoring sales taxes were largely disconnected from whether or not a company had a physical footprint. States also argued against the previous statute, saying that it reduced their potential revenue from sales taxes as more consumers turn to digital shopping options. But half of Amazon's sales are from third-party Marketplace sellers, who for the most part don't collect sales taxes.

Only five states do not collect a statewide sales tax. Chief Justice John Roberts wrote a dissenting opinion.

Only five states do not have a state-wide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. In what has been called the "tax case of the millennium" by the National Conference of State Legislatures, South Dakota sued Wayfair, an online furniture retailer, because the shop omitted state sales tax from its orders. Some Marketplace sellers have contracted with Amazon to collect sales taxes for them.

Three identical bills were filed during the special session to match Louisiana's law with South Dakota's in case the U.S. Supreme Court allows...

Chicago was one of the first areas to impose a so-called Netflix tax but other states and towns have started to tax streaming and video services. Amazon.com Inc. shares fell as much as 1.9 percent before paring losses. Other retailers-including Etsy, eBay, and Wayfair-are also seeing huge stock dips.

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