Supreme Court rules U.S. states can tax goods sold online


The Court in Wayfair overruled Quill as well as an earlier physical presence case, National Bellas Hess v. Department of Revenue of IL.

Recent attempts at the Roundhouse to impose the state's gross receipts tax on internet vendors have failed - one proposal was line-item vetoed by Gov. Susana Martinez past year - but lawmakers from both political parties have described the measure as a fairness issue that could help local businesses.

"Allowing states to reach across borders and collect state taxes from online retailers is taxation without representation that will harm small businesses the most", AFP Policy Manager Mary Kate Hopkins said in a statement.

"I think the bigger worry though for businesses here is if these states will come back for back taxes", he said. It's also not known if Congress might set a uniform ceiling that all states would have to adhere to. Brick-and-mortar gets some relief. That's where an order late in the year could immediately implement the sales tax. They are linked to databases that track tax rates in the 45 states that charge sales tax, and in the thousands of counties and municipalities that have their own taxes. The results were published in the April 1 issue of BRAIN.

In a ruling that could benefit Nebraska and Iowa tax coffers, the U.S. Supreme Court says states can force online shoppers to pay sales tax.

Prior to Wayfair v South Dakota, businesses that didn't have a physical location in a state were not required to remit sales taxes to that state government for their sales.

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As The New York Times reported,"Writing for the majority in the 5-to-4 ruling, Justice Anthony M. Kennedy said the Quill decision had distorted the nation's economy and had caused states to lose annual tax revenues between $8 billion and $33 billion".

The high court on Thursday overturned a 1992 ruling that a retailer must have a physical presence in a state to collect tax from buyers in that state. The losers are small online retailers who could be devastated by new compliance costs.

Rep. Tom Reed, R-N.Y., said he supported the ruling's creation of a level playing field between online sellers and physical retailers.

They will have to examine and retrofit operations to determine where they have to collect tax, whether their goods are taxable, and how they will handle tax computation, filing, and remittance, consultants said. The latter provisions were included to alleviate the burden on small businesses. Prior to this decision, the law of the land had been set by the Supreme Court in Quill v.

The high court decided that states have the right to mandate sales charges from retailers whether or not they have a physical location within the state. And it sued Wayfair, and Newegg, which won in lower court decisions. Big players will be affected Large online sellers such as Amazon, Walmart, and Target frequently collect states taxes but not local taxes. IL residents are required to pay state sales tax if the site doesn't add it.

Amazon has long lobbied for a federal law that streamlines online sales tax collection nationwide, but none has ever gained traction.