Online Retailers Lose State Tax Subsidy

Donald Trump

Supreme Court closes online sales tax loophole

"I'd much rather have people buy their tickets at our front desk and keep the tax local".

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. North Dakota, deciding that companies should charge sales tax even in states where they have no physical location.

The ruling is a victory for states that said they were losing billions of dollars in revenue every year, and for large retailers that had argued that the physical presence rule meant they were playing by different rules than online-only sellers. "Regardless of how Americans shop for goods, whether that's on the internet or in our neighborhood small businesses, we must expect that all retailers face equal sales tax treatment". Brey, who also has an online business, has closed three stores.

The Supreme Court decision ruled local governments can now decide if an online retailer that sells goods into the state, that don't have a physical presence, would have to register as a dealer and collect taxes. Even before the Supreme Court's ruling, however, Amazon had said it was moving to collect state sales taxes on its inventory sold in all 45 states with statewide taxes. 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.

"This is an issue for the Legislature, and legislation would have to be passed to authorize the state to enforce the collection of out-of-state sales taxes". The NRF had argued in a friend-of-the-court brief past year that there's a wide variety of software available to automatically collect the sales tax owed.

"New Hampshire's lack of a sales tax is a competitive advantage for our state, and this decision will unfairly punish small businesses that are the backbone of our economy", U.S. Senator Maggie Hassan said in a statement. The law did carve out an exemption for small merchants - those with fewer than 200 customers in the state annually or sales below $100,000.

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Carl Davis, research director for the Institute on Taxation and Economic Policy, a non-partisan think tank, told Business Insider the Trump Store's sales tax collection policy is "a textbook example of the problem that this ruling is meant to address". Some shoppers may not notice, or care, analysts say.

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

"I'll do what needs to be done and get it taken care of", said Dave "Lando" Landis, owner of Rocker Rags, a New Mexico-based online seller of clothing with photos and logos of rock musicians.

Sales tax collection in Florida already has been evolving.

"New York and California would likely have to make some pretty big changes", said John Buhl of the Tax Foundation.

The winners are local brick and mortar businesses, which will be able to compete pricewise with online retail giants.

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