On June 21, the US Supreme Court overturned a 26-year ban on levying online sales tax, satisfying South Dakota's complaint of an outdated ruling that had made much of the internet a tax-free zone.
It should also help brick-and-mortar retailers, who have suffered for years from uneven competition with online stores that don't have to collect the state's 6.25 percent sales tax.
South Dakota State Senator Deb Peters, President of the National Conference of State Legislatures, noted that small businesses have faced an uphill battle against out-of-state vendors, who have been able to charge lower prices because they didn't have to collect sales taxes.
The cases the court overturned said that if a business was shipping a product to a state where it didn't have a physical presence such as a warehouse or office, it didn't have to collect the state's sales tax.
If you enjoyed the illicit thrill of avoiding the 6.25 percent IL sales tax on internet purchases of running shoes or steaks, you'll mourn the court's opinion in South Dakota v. Wayfair.
"One report says West Virginia stands to have the second-biggest gain on a percentage basis in the country by collecting on online sales", he said. Other states are free to set their own thresholds, and it's not known what they might be or how long it would take for all the states to weigh in, says David Campbell, CEO of TaxCloud, a provider of tax compliance software. The internet has changed retailing, and Justice Anthony Kennedy, who wrote the new decision, said, "each year, the physical presence rule becomes further removed from economic reality".
"I understand that the customer is going to have to pay more". They pay sales tax there. Lawmakers in the state, which has no income tax, passed a law created to directly challenge the Supreme Court's 1992 decision. He said the court should not be doing the work of Congress, even if its earlier precedents were wrongly decided. The NRF had argued in a friend-of-the-court brief previous year that there's a wide variety of software available to automatically collect the sales tax owed. "But once that happens, Trump Store and other internet retailers are going to have to start collecting sales taxes in states where they do a meaningful amount of business".
Macon online business owner Julie Evans says she wants to see the money stay locally.
The South Dakota Supreme Court invalidated the law because Quill Corp. v. In 2015, 72.5 percent of Tennessee's total tax revenues came from sales tax.
"With today's ruling, all businesses will compete on a level playing field", said South Dakota Gov. Dennis Daugaard (R), whose state brought the challenge to the Supreme Court. The court in Wayfair overruled Quill as well as an earlier physical presence case, National Bellas Hess v. Department of Revenue of IL. "I don't have to drive", said Thornsberry.
Now, for the first time since 1992, any of the USA states have the right to impose a tax on online shopping.
We are asking you to join us and digitally sign our petition to show our political leaders that you stand against new Internet tax burdens that could permanently damage USA small businesses like yours. "And it's about time".