It what will likely have an impact on the country’s e-commerce market, the United States Supreme Court today ruled in a five-to-four decision that states are within their rights to force online businesses to collect sales taxes even if the businesses don’t have a physical presence in that particular state. The ruling handed down today overturns a previous decision from the apex court given back in 1992 which allowed for online retail to boom in the country.
The decision in the 1992 Quill Corp. v. North Dakota case prevented states from making online businesses collect sales taxes if they didn’t have any physical connection with that particular state.
“Remote sellers can avoid the regulatory burdens of tax collection and can offer de facto lower prices caused by the widespread failure of consumers to pay the tax on their own,” says Justice Anthony Kennedy, who wrote the decision for the majority.
The decision addresses concerns that physical retailers have long expressed. Their online rivals are capable of offering lower prices because they enjoyed an unfair advantage since they didn’t need to charge local sales tax to customers.
This ruling means that states will now be able to make online businesses that have no physical connection with them collect sales taxes from customers. However, it doesn’t specify if states will be able to retroactively seek taxes from these businesses.
Filed in .. Source: supremecourt.gov