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Supreme Court closes online sales tax loophole

21 June 2018

The ruling could easily improve revenue in states that have taken a hit from online sales. Jeanne Shaheen said in a statement. Although technically consumers are required to pay sales tax on all purchases, it is practically impossible to collect without the retailer applying it at the point of sale. It also impacts Amazon, but only for the goods it sells from third-party merchants.

They argue tax-collection software makes it easier for retailers big and small to comply with their tax obligations, which vary widely from state to state, and product to product.

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

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It ruled that the provision amounted to a "judicially created tax shelter" that put some companies at an advantage.

The high court ruled Thursday to overturn those decisions. Texas had estimated it was losing $1 billion a year in sales taxes because of the law.

"The burden will fall disproportionately on small businesses", he wrote. The 1992 ruling, he wrote did not understand the realities of 2018's online retail sector.

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Amazon's stock is down almost a percent since the announcement, Etsy is down 3.12 percent. North Dakota, that states could not extend their taxing authority to companies that had no stores, warehouses or "physical presence" within the state. Until now, online retailers with no physical presence in a state were not. "The current tax system favors online retailers over brick-and-mortar businesses, and undermines fair and open competition in the marketplace", wrote the National Retail Federation in a statement. They said a decision in a case involving mail-order catalogues is obsolete in an era of e-commerce.

South Dakota was backed by 35 states in the case, each of which filed an amicus brief in support of online sales tax. The law could yet face legal challenges on other grounds, Kennedy noted.

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.

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You will soon likely be paying more in taxes for online purchases. First, the Act applies a safe harbor to those who transact only limited business in South Dakota. However, Alaska and Montana allow individual individual cities to collect local sales taxes, according to the Tax Foundation.

Supreme Court closes online sales tax loophole