The Supreme Court ruled in the case of South Dakota vs. Wayfair this morning, a case revisiting the collection of sales taxes by states and local communities.
The SCOTUS Quill decision, back about 1992, in the early days of online retailing, ruled that retailers without a physical presence in a state were not required to collect and remit state and local sales taxes. At that time, online retailing was a minor presence and the taxes lost were pretty small. However as online retailing has grown over the past couple of decades, accounting for about 10-15% of all retail sales, the sales tax revenue loss has impacted states and cities severely. Just ask anyone in management at Carbondale City Hall.
Under the South Dakota law, which was upheld today, any retailer doing more that $100,000 in online sales or with over 200 customers in the state, is required to collect and remit sales tax to the state. This ruling only affects South Dakota but opens the way for other states to enact similar laws or for Congress, under the Commerce Clause of the Constitution, to enact some sort of national regulation. Since there is no national sales tax in place, I doubt we will see any national form of sales tax collection put into place though.
The SCOTUS Quill decision, back about 1992, in the early days of online retailing, ruled that retailers without a physical presence in a state were not required to collect and remit state and local sales taxes. At that time, online retailing was a minor presence and the taxes lost were pretty small. However as online retailing has grown over the past couple of decades, accounting for about 10-15% of all retail sales, the sales tax revenue loss has impacted states and cities severely. Just ask anyone in management at Carbondale City Hall.
Under the South Dakota law, which was upheld today, any retailer doing more that $100,000 in online sales or with over 200 customers in the state, is required to collect and remit sales tax to the state. This ruling only affects South Dakota but opens the way for other states to enact similar laws or for Congress, under the Commerce Clause of the Constitution, to enact some sort of national regulation. Since there is no national sales tax in place, I doubt we will see any national form of sales tax collection put into place though.
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