Realtors® Commend Supreme Court Decision Promoting Fairness Between Online, Main Street Businesses

Supreme Court rules that states may require online retailers to collect sales taxes

States can collect sales tax from online sellers even if those companies don't have a physical presence in the state, The Supreme Court ruled Thursday morning in a case with far-reaching implications for the future of online commerce.

NRF has been a leading voice for equal sales tax rules for years, saying that Quill gave online sellers an unfair price advantage over local merchants.

That decision did allow for the then-nascent e-commerce industry to grow in the early days of the internet, but Justice Anthony Kennedy wrote in the majority opinion that it was now outdated.

It's unclear how long it could take for such sales tax collections to begin, or how much money the treasury could collect. Disagreement also emerged about whether Louisiana has several key provisions on the books to match the requirements involved in the Supreme Court ruling for online sales tax collection.

The biggest e-tailer in America, Amazon, now collects sales tax in the 45 states that charge sales tax, though it does not collect taxes on items sold by third-party sellers. But some states, including Washington, have recently passed marketplace bills which force the company that provides the platform for sellers - such as Amazon, Etsy and, eBay - to collect sales tax rather than the asking the seller to do so.

Given the controlling precedent of Quill, on October 2, 2017, the Attorney General's Office filed a petition for certiorari asking the U.S. Supreme Court to review the South Dakota Supreme Court decision in State of South Dakota v. Wayfair, Overstock and Newegg.

But note that the Court only says that the South Dakota law is OK for South Dakota, without defining what "OK" means for all the other states.

NRF argued in a friend-of-the-court brief a year ago that the court's 1992 Quill Corp. v. If a company doesn't expect to reach the threshold in a state, it may decide not to collect tax.

More traditional brick and mortar retailers had long claimed the ruling put them at a notable disadvantage to online retailers, many of which don't charge sales tax whatsoever. Note that consumers who live in one of the five states without a sales tax...

A U.S. Supreme Court ruling that paves the way for states to collect more sales taxes from online purchases has upended shaky tax negotiations among lawmakers in the Louisiana House.

Likewise, advocates for the state's mom-and-pop stores - which primarily make sales in brick-and-mortar outlets, not online - say that two-decade-old decision harmed small business owners.

Amazon already voluntarily collects and remits sales tax on goods that it manufactures and sales. The Supreme Court's ruling related to online sales taxes is a common-sense approach that modernizes existing limitations on the taxation of e-commerce sales and will facilitate collections in our global, technology-driven economy.

He also said it hurts the states' ability to raise revenues. North Dakota, which held that only those businesses with a physical presence in a state had to collect sales taxes from customers in that state.

States that rely more heavily on sales tax - as opposed to personal income tax, for instance - "are the big winners here and could see real budget gains if they follow South Dakota's example", said Fitch Ratings analyst Stephen Walsh.

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