The U.S. Supreme Court on Thursday ruled that states may require online retailers to collect sales tax revenue from online consumers who live in their states.
Before the ruling only retailers with stores had to collect sales tax while e-commerce retailers could skip collecting them, which helped them lower prices.
Online retailers will have to deal with a hodgepodge system until Congress enacts a federal standard, which is unlikely this year given the midterm elections in November.
Blair says the new ruling will have to be studied further, and the U.S. Congress would have to first pass legislation before any changes would be considered locally. "Today's landmark decision is a win for South Dakota and for Main Street businesses across America that will now have a level playing field and tax fairness".
"(Local option sales tax revenue) is 24 percent of our general fund budget.
Businesses that aren't traditional retailers hope they'll get back lost sales. It passed a law that required all merchants to collect a 4.5 percent sales tax as long as they had more than $100,000 in sales or more than 200 individual transactions in the state.
Although it is the poster child for big e-commerce, Amazon wasn't involved in the lawsuit and the immediate decision doesn't affect the company dramatically. "Great victory for consumers and retailers". He said that the court's decision would result in "48 to 58 million dollars that South Dakota can use for education, healthcare, and infrastructure". The biggest online retailer, Amazon.com, took a small hit, even though it already collects taxes on its sales in all states.
Nebraska Tax Commissioner Tony Fulton said Thursday morning that officials were still reading the court opinion and could not comment on how it might affect the state.
"It's disappointing to have to turn away business", Gendelman said, "but the Supreme Court hasn't left us much choice".
Justice Anthony Kennedy wrote that the previous decisions were flawed. Kennedy wrote that the rule "limited States' ability to seek long-term prosperity and has prevented market participants from competing on an even playing field".
The US Supreme Court says states can force online shoppers to pay sales tax. "There's no desire by the Republican majority to increase taxes on the people of West Virginia", Blair told The Register-Herald Friday afternoon. Amazon.com and Overstock.com are among the companies that say they support a nationwide law that would relieve retailers from dealing with a patchwork of state tax laws.
Brick-and-mortar specialty outdoor retailers have been at a competitive disadvantage against internet sellers who do not always collect sales tax. When Amazon opens a fulfillment center in a state, it starts collecting sales tax, noted the report.
The case decided was South Dakota v. Wayfair; South Dakota was suing Wayfair, an e-commerce retailer that does not collect state taxes.
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 a year ago - but lawmakers from both political parties have described the measure as a fairness issue that could help local businesses.
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