High Court: Online shoppers can be forced to pay sales tax

Business Law

The Supreme Court says states can force online shoppers to pay sales tax. The 5-4 ruling Thursday is a win for states, who said they were losing out on billions of dollars annually under two decades-old Supreme Court decisions that impacted online sales tax collection.

The high court ruled Thursday to overturn those decisions. They had resulted in some companies not collecting sales tax on every online purchase. 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, the business didn't have to collect the state's sales tax. Customers were generally supposed to pay the tax to the state themselves if they don't get charged it, but the vast majority didn't. Justice Anthony Kennedy wrote that the previous decisions were flawed.

"Each year the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the States. These critiques underscore that the physical presence rule, both as first formulated and as applied today, is an incorrect interpretation of the Commerce Clause," he wrote.

In addition to being a win for states, the ruling is also a win for large retailers, who argued the physical presence rule was unfair. Retailers including Apple, Macy's, Target and Walmart, which have brick-and-mortar stores nationwide, generally collect sales tax from their customers who buy online. That's because they typically have a physical store in whatever state the purchase is being shipped to. Amazon.com, with its network of warehouses, also collects sales tax in every state that charges it, though third party sellers who use the site to sell goods don't have to.

But sellers that only have a physical presence in a single state or a few states could avoid charging customers sales tax when they're shipping to addresses outside those states. Online sellers that don't charge sales tax on goods shipped to every state range from jewelry website Blue Nile to pet products site Chewy.com to clothing retailer L.L. Bean. Sellers who use eBay and Etsy, which provide platforms for smaller sellers, also aren't required to collect sales tax nationwide.

Related listings

  • High court to hear challenge to Virginia uranium mining ban

    High court to hear challenge to Virginia uranium mining ban

    Business Law 05/17/2018

    The Supreme Court agreed Monday to hear a challenge to Virginia's decades-old ban on uranium mining.The state has had a ban on uranium mining in place since 1982, soon after the discovery of a massive uranium deposit in the state's Pittsylvania Count...

  • UN court lays down Costa Rica, Nicaragua maritime borders

    UN court lays down Costa Rica, Nicaragua maritime borders

    Business Law 02/05/2018

    The International Court of Justice laid down definitive maritime boundaries Friday between Costa Rica and Nicaragua in the Caribbean Sea and Pacific Ocean and a small land boundary in a remote, disputed wetland.As part of the complex ruling, the Unit...

  •  Samsung worker killed by brain tumor wins compensation case

    Samsung worker killed by brain tumor wins compensation case

    Business Law 11/13/2017

    Overturning an appeal court's decision, South Korea's Supreme Court said Tuesday the family of a Samsung worker who died of a brain tumor should be eligible for state compensation for an occupational disease.The ruling on Lee Yoon-jung, who was diagn...

USCIS to Begin Accepting Applications under the International Entrepreneur Rule

U.S. Citizenship and Immigration Services (USCIS) announced today it is taking steps to implement the International Entrepreneur Rule (IER), in accordance with a recent court decision. Although the IER was published during the previous administration with an effective date of July 17, 2017, it did not take effect because the Department of Homeland Security (DHS) issued a final rule on July 11, 2017, delaying the IER’s effective date until March 14, 2018. This delay rule was meant to give USCIS time to review the IER and, if necessary, to issue a rule proposing to remove the IER program regulations.

However, a Dec. 1, 2017, ruling from the U.S. District Court for the District of Columbia in National Venture Capital Association v. Duke vacated USCIS’ final rule to delay the effective date. The Dec. 1, 2017, court decision is a result of litigation filed in district court on Sept. 19, 2017, which challenged the delay rule.

Business News

Eugene, OR Criminal Defense DUII Attorney MJM Law Office was founded to provide clients with representation in Criminal Defense. >> read