Local reaction to SCOTUS online sales tax ruling

Todd Singleton
June 26, 2018

The previous court decisions "created an inefficient 'online sales tax loophole" that gives out-of-state businesses an advantage. North Dakota - that had blocked states from compelling retailers with no "physical presence" in that state to collect sales taxes.

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.

Trump has repeatedly made clear that he thinks online retailers should collect sales taxes.

In a statement issued Thursday, Fox said the court's order will be bad for Montanans buying products online from other states, as well as small business selling online outside the state.

Wayfair stock was down 2.5 percent in morning trading, while shares of online craft marketplace Etsy dropped more than 3 percent.

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The case, South Dakota v. Wayfair, overturned a 1992 Supreme Court decision that protected online vendors from sales tax obligations if the vendor did not have a physical brick and mortar store in the state.

Justices Anthony Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito, and Neil Gorsuch delivered the opinion while John Roberts, Stephen Breyer, Sonja Sotomayor, and Elena Kagan dissented.

"E-commerce has grown into a significant and vibrant part of our national economy against the backdrop of established rules, including the physical-presence rule". The retail industry is changing, and the Supreme Court has acted correctly in recognizing that it's time for outdated sales tax policies to change as well. The Supreme Court heard the case in April of this year and decided in South Dakota's favor. Amazon.com, with its network of warehouses, also collects sales tax in every state that charges it, though third-party sellers who use the site to sell goods don't have to.

"Being put at an nearly 10 percent disadvantage when you're selling a hardware item is significant pretty significant for a small business", said Mitchell. Attorney General Marty Jackley said it was a win for South Dakota and for "Main Street businesses across America that will now have a level playing field and tax fairness". For others, it also included the added bonus of not having to pay sales tax from select merchants. The law applies to out-of-state retailers if they have more than $100,000 in sales or complete more than 200 transactions per year within South Dakota.

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