Business leaders optimistic following US Supreme Court sales tax ruling

Isaac Cain
June 24, 2018

In a 5-4 vote, the U.S. Supreme Court chose to reverse a 26-year-old decision saying that all states can now require internet retailers to collect sales and use tax in states where they lack a physical presence.

Adrienne Kosewicz who pays $3,300 a year for tax compliance software for sales in her home state, Washington, expects that collecting taxes in other states will raise costs by a manageable 10 percent at her Seattle-based online business, Play It Safe World Toys.

South Dakota law requires retailers with more than $100,000 in sales or 200 transactions annually in the state to pay a 4.5 percent tax on purchases.

The decision allows states to require out-of-state businesses to collect sales tax from customers in other states - for example, a retailer in Utah who sells goods to a customer in NY would have to calculate and collect the NY sales tax.

The National Retail Federation trade group has hailed the Supreme Court's sales tax decision as a "major victory".

Gov. Justice says this is a legislative issue that would have to be passed for the state to enforce the collection of out-of-state sales taxes.

While this ruling is beneficial to state governments, it stands to have a negative impact on retailers and consumers alike. "I'd much rather have people buy their tickets at our front desk and keep the tax local".

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"There's no reason you should have to pay sales taxes in one scenario and not the other", Deskins said.

Meanwhile, a statement release Thursday said the state Chamber was "very pleased" with the decision.

"The Supreme Case opens the opportunity for Oklahoma to craft more laws in the future that applies to a broader range of entities that are out of state", she said. In dissent, Chief Justice John Roberts said Congress should be making this decision, not the courts.

Sites such as eBay and Etsy, which serve as a marketplace for individual merchants and small businesses, said that having to collect taxes across the country would put their sellers at a disadvantage.

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. He said that the court's decision would result in "48 to 58 million dollars that South Dakota can use for education, healthcare, and infrastructure". Congress could also step in and block retroactivity, Jones said. The state also provides sales tax collection software for free for any business that wants it, and using that software immunizes the business from audit liability. "It automatically made the playing field unlevel for those entities that are here in the state doing business and participating in our community". She recalled Thursday that she started looking at this issue in 1992, when the Supreme Court in Quill v.

"It is going to squash the entrepreneurship, I just can not stress that enough", Christy Keyon, who owns Bird and Bean Coffee House and Naomi and Olive Gift shop said.

As of Friday, the Trump Organization's online retailer, TrumpStore.com, collects sales tax in Florida, Louisiana, New York, and Virginia, according to its website.

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