Published: Sun, June 24, 2018
Finance | By Loren Pratt

You’re About to Pay Higher Online Taxes After Supreme Court Ruling

You’re About to Pay Higher Online Taxes After Supreme Court Ruling

But the third party sellers on Amazon do not.

The ruling stems from a dispute between three online retailers and the state of South Dakota, which passed a law in 2016 that required firms doing a certain amount of business in the state to collect sales tax from customers.

The court on Thursday revived a South Dakota law that requires retailers with more than $100,000 in annual sales in the state to pay a 4.5% tax on purchases.

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

According to the Nevada Department of Taxation, the rule could increase the states sales tax collections by almost $30 million annually. Kennedy also said the previous ruling effectively created tax shelters for retailers.

"Any adjustment to those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress", he wrote.

It's clear that the court's decision will mean extra cash for states.

"As far as a local business owner and someone who avidly thinks downtowns are important needing some of these special small and niche businesses, I think the websites having to charge sales tax just helps even the playing field".


"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. Instead, consumers themselves were expected to voluntarily submit the required taxes-and many did not.

A 2011 report issued by the Indiana Fiscal Policy Institute found the state is likely losing about $77 million in sales taxes on these e-commerce transactions each year.

"The average cost is about $250,000 to implement, which is more than what we profited in 2017", Ruth Jeffers-Phillips said. "So, by relying on a sales tax, you have to make sure it's modern and up to date".

The exact impact of the ruling on Florida's sales tax collections is unknown but it could be significant.

"Trump Store could have been collecting sales taxes on its bathrobes and slippers and golf balls all along, but it made a business decision not to do so and, until now, states had limited options for requiring tax collection", he said.

Georgia state officials have been pushing for more internet retailers to pay taxes in recent years. She says the new online sales tax won't stop her. The Quill court ruled that the catalog seller didn't have to collect sales tax from North Dakota residents.

Will people be turned off online shopping by a sales tax?

Like this: