Should local businesses be 'fearful' after a U.S. Supreme Court ruling?

24 June, 2018, 23:40 | Author: Salvatore Jensen
  • Supreme Court closes online sales tax loophole

He said the court should not be doing the work of Congress, even if its earlier precedents were wrongly decided. Hart Posen an associate professor at the Wisconsin School of Business thinks that the decision can be a boon for Amazon.

Over on NBC News, they are reporting that the US Supreme Court has ruled 5-4 that states can now force retailers to collect sales tax on online sales regardless of where the business is located.

The decision allows states to require out-of-state businesses to collect sales tax from customers in other states - for example, a retailer in Utah who sells goods to a customer in NY would have to calculate and collect the NY sales tax.

This law affects IL shoppers that check out of shopping sites without paying sales tax, and the sites are now required to add them.

Most states now have some kind of sales tax, though the amount-and what items or services are taxed-varies widely from state to state. It is impossible for any one business to know. When a web retailer doesn't collect sales tax, the consumer is supposed to pay a use tax (surprise!), but the compliance rate is notoriously low (no surprise).

"Remote sellers will be required to collect and remit sales tax to North Dakota only if they make a minimum of either 200 sales or $100,000 in sales per year in North Dakota, even if they don't have a physical presence here".

That led Amazon.com (AMZN.O) to start collecting taxes on its entire platform, including third-party merchants, in Washington starting in January. The whole system became a messy patchwork. But random loopholes are not the hallmark of a good tax code.




Sales tax collection in Florida already has been evolving.

"This will level the playing field between online sellers and brick-and-mortar stores", was the phrase echoed by five state and local officials.

That means the government either has to cut back on services or it has to raise taxes on something else. "It's vital we continue getting that and that we continue getting growth, not just stagnant collections each year", Jennings said at the time.

Searching for the best deals online is Emmy Thornsberry's favorite thing to do.

Because of the Commerce Clause of the US Constitution, states are still subject to a requirement not to discriminate against or unduly burden out-of-state sellers. However, following this recent decision from the Supreme Court, that's no longer the case.

"You are now going to have to invest in software that is going to help you, hopefully, to be able to navigate those state's laws". "This is a significant increase in competitiveness for local retail". And it is a member of the Streamlined Sales and Use Tax Agreement (SSTA), an interstate compact under which 21 states have agreed to adopt uniform rules about various aspects of their sales taxes.

"As a regional destination for working, eating, entertainment, and shopping, sales tax revenue is a major part of how we operate our government and improve our community", said Chris Floore, assistant to the county manager for public affairs for Macon-Bibb County.

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