You might find yourself being charged more for online purchases in the near future.
The U.S. Supreme Court’s ruling Thursday in the case of South Dakota v. Wayfair Inc. effectively enables states to require online retailers to collect sales taxes, even if a retailer has no physical presence in a given state.
The court’s decision overturns a 1992 ruling — Quill Corp. v. North Dakota — that many brick-and-mortar retailers and state governments have bemoaned for years. The New York Times explains:
“Brick-and-mortar businesses have long complained that they are disadvantaged by having to charge sales taxes while many of their online competitors do not. States have said that they are missing out on tens of billions of dollars in annual revenue under a 1992 Supreme Court ruling that helped spur the rise of internet shopping.”
Even if state or federal legislators write new laws governing online sales, however, you may not necessarily see a big change in how you are taxed when shopping online.
For example, Bloomberg reports that many major online retailers have already been collecting taxes in the states where they do have a physical presence.
Additionally, even Amazon has been collecting sales tax in every state with a statewide sales tax — which is all but five states:
- New Hampshire
The nonprofit Tax Foundation also points out that 31 states already have laws that tax internet sales.
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