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Supreme Court says US states can tax online sales
WASHINGTON, June 22, 2018 (BSS/AFP) – The US Supreme Court ruled Thursday that
American states had the right to tax internet sales of goods and services.
The decision, in which South Dakota prevailed over the online furniture
retailer Wayfair, immediately sent ripples through the internet shopping
industry sending shares tumbling in Amazon, eBay, Etsy and others.
The court’s nine justices split five to four in overturning a prior
Supreme Court decision that had held that a state can only tax sales by
businesses that are physically present in that state.
South Dakota’s case was supported by 35 states and the federal government
and saw the Supreme Court undo a 1992 ruling in which it had held that the
mail-order company Quill did not have to collect sales taxes in North Dakota.
The court held that its prior “physical presence rule” was “unsound and
incorrect” and so prior decisions from 1967 and 1992 were both overruled.
State coffers, many of which are struggling with deficits, stand to gain
billions.
The decision also effectively acknowledged the profound shifts in the
American retail landscape.
Shopping centers, department stores and major retail outlets have laid off
thousands of workers and are struggling to remain open as consumers turn to
internet home delivery for an ever-increasing array of goods and services.
In a concurring opinion, Justice Clarence Thomas said that after ruling
for the retailer in 1992, he had changed his mind.
A “quarter century of experience has convinced me” the Supreme Court’s
earlier decision was no longer justified, he wrote, adding that it was “never
too late” to arrive at a better position.
BSS/AFP/HR/1050