Wednesday, 18 April 2018

The Supreme Court seems divided over sales tax on online purchases

BILLIONS of dollars and long-standing interstate e-commerce rules are at stake in a case that came before the justices on April 17th. The case revisits an old Supreme Court rule that retailers shipping goods to states where they have no physical presence cannot be forced to collect sales tax from their customers. This standard is outdated, South Dakota's attorney-general told the justices, and deprives states of “massive sales tax revenues that we need for education, healthcare and infrastructure”. 

The conflict in South Dakota v Wayfair Inc arose in 2016 when the Midwestern state noticed that more of its residents were shopping online. In defiance of a quarter-century-old Supreme Court precedent, South Dakota tried to shore up its declining revenues by imposing sales-tax collection on far-flung stores doing more than $100,000 of business, or conducting more than 200 transactions, in the state. 

When the conflict hit the lower courts, South Dakota’s law was struck down as a violation of the...Continue reading

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