NRF applauds online sales tax decision

Randal Sanchez
June 24, 2018

For small businesses, this could mean a more even playing field, since large online retailers have been able to skirt taxes in states where they don't have a physical presence. By early 2017, Amazon was collecting sales taxes in all states that have sales taxes, but it was doing so only for merchandise it sells directly, not for merchandise other retailers sell on its platform.

"We collect $1.3 billion in state sales taxes in West Virginia", he said. B&H doesn't require that buyers pay sales tax if they place orders outside of NY or New Jersey, and while you're supposed to later pay those uncollected funds when tax time comes around, the vast majority of people don't.

And for the state of Georgia and local governments, a U.S. Supreme Court ruling Thursday means hundreds of millions of dollars in extra revenue pouring in annually. Lawmakers can model the South Dakota law that was at issue before the Supreme Court, which would require retailers to collect the tax only if they delivered more than $100,000 of goods or services into the state or had more than 200 deliveries a year.

The Retail Industry Leaders Association, another trade group, said the ruling allows retailers to compete "without government's thumb on the scale" and called it "a win for all those who believe in free markets".

States also still must announce dates by which retailers must be in compliance, says Scott Peterson, a vice president at Avalara, a manufacturer of tax collection software. If people bought in stores they would have to pay the state tax anyway and it may be convenient and often cheaper still to buy online.

What happens next? IL has on the books a provision identical to South Dakota's, so it should be able to move quickly to require sales tax in most online transactions.

A sales tax is supposed to be a broad tax on consumption: You buy and use things, you pay tax.

Get ready for more sales taxes on online purchases
However, Alaska and Montana allow individual individual cities to collect local sales taxes, according to the Tax Foundation . Before this ruling , online retailers had to have a physical presence in a state to be subjected to that state's sales tax .

"I don't have to travel anywhere and typically online prices are still lower than retail stores", Teisanu said. IL residents are required to pay state sales tax if the site doesn't add it.

In any event, today's decision is a victory for bricks and mortar retailers who have built stores in Hawaii and have employed local residents.

"It was an issue of fairness since brick-and-mortar businesses must pay property and sales taxes while online retailers were exempt", said England, who serves as chairman of the House's appropriations committee.

The high court decided that states have the right to mandate sales charges from retailers whether or not they have a physical location within the state. For example, if you buy a laptop or printer from Newegg or a loveseat from Overstock you should budget for state sales tax.

In Oklahoma and in Norman, the biggest online retailer, Amazon, was already voluntarily remitting sales tax which comes to the city from the Oklahoma Tax Commission as a use tax.

In a previous statement before the overturning of Quill vs North Dakota, Rauschenberger said North Dakota was "missing out on up to $50 million in revenue each year".

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