AL governor, retail association praise SCOTUS online sales tax ruling

Expect an added expense for that rug from Wayfair

By early 2017, Amazon was collecting sales taxes in all states that have sales taxes, but it was doing so only for merchandise it sells directly, not for merchandise other retailers sell on its platform. It overturns a 1992 Supreme Court decision on a North Dakota case that only required taxes on goods from a business located inside the state, letting mail-order catalog sales to go untaxed. Amazon collects sales tax for products that it sells directly, but third-party vendors that sell goods on the site may not collect sales tax.

Amazon isn't the only Seattle company indirectly impacted by the Supreme Court decision.

One federal report released a year ago found that state and local governments lost out on $8 to $13 billion in tax revenue because they couldn't collect sales taxes from online retailers.

Additional reporting from Newsy affiliate CNN.

While Davids estimates that the ruling would bring $150 million into state coffers, some estimates top $200 million more on top of the $64 billion, two-year budget.

"Correctly calculating and remitting sales taxes on all e-commerce sales will likely prove baffling for many retailers", he wrote.

In his dissent, Chief Justice John Roberts argued that requiring sales tax collection could be a big burden.

Joe Henchman, who runs the state tax policy project at the Tax Foundation*, a conservative think-tank that supports the Wayfair decision, has been talking with officials from states who are looking to tax online sales in a way that complies with it.

The Supreme Court overrules the Quill case, which previously set the precedent for collecting sales tax from online sellers.

Amazon has always been the "poster child" for this problem/opportunity as they have been the dominant online-only retailer for some time. If a business had a physical presence in a state, then they could be forced to collect sales tax at the time of purchase. The ruling upheld a South Dakota law that exempts sellers with $100,000 or less in sales in the state.

"It's not as easy as pushing a button", because businesses will need to make decisions about where they're going to collect tax, Yesnowitz says. The 5 to 4 majority decision handed down by the US Supreme Court this week has local retailers smiling. "We think that incentive, that carrot if you will, is strong enough to clean up our state and local sales tax codes", McCarthy said. E-commerce giant Amazon has collected sales tax from IL shoppers since 2015.

"Vets all over the country have lost a lot of income for a long time", says Dr. John de Jong, owner of Newton Animal Hospital in MA and president-elect of the American Veterinary Medical Association.

Some tax experts said the ruling could turn out to be nearly as significant for American businesses as the recent rewrite of the USA federal tax code.

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