USA court backs states over web sales tax

In a ruling that may impact cord cutting the United States Supreme Court in a 5-4 decision said that states can collect sales taxes online.

Although in the past Americans may have purchased online to avoid paying sales tax, they are increasingly shopping online to get items quickly and without having to leave the house, retail experts say.

North Dakota from 1992, which set the property or employees standard for sales taxes using the Court's (debated) dormant commerce clause power to restrict state taxation of interstate commerce.

In the digital era, the costs of complying with different tax regimes "are largely unrelated to whether a company happens to have a physical presence in a state", Kennedy wrote.

Anyway, that's that. Within a year or less, every state will collect sales tax on internet and mail-order sales.

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The court, in a ruling authored by conservative Justice Anthony Kennedy, revived a 2016 South Dakota law that required larger out-of-state e-commerce companies to collect sales tax, a mandate that the online retailers fought in court.

Each state has a complex sales tax system, which was cited in the 1992 Quill case as a reason against requiring businesses to collect the dues in states where they had no physical presence. Now governments will be able to collect billions of dollars in local sales tax.

After states and traditional retailers have grumbled about this situation for years, South Dakota finally made a decision to do something to change it.

Shares of online retailers fell sharply following the ruling, with Wayfair down 3.8 percent, Overstock off 2.1 percent and Etsy Inc shares off 4.4 percent.

Three identical bills were filed during the special session to match Louisiana's law with South Dakota's in case the U.S. Supreme Court allows... The state conceded in court, however, that it could only win by persuading the supreme court to do away with its physical presence rule.

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