Supreme Court decision on sales tax could see local impact

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States such as South Dakota, which have no income tax and rely heavily on sales taxes, stand to gain the most from the new ruling, according to a Barclays research note.

The decision came on a South Dakota suit against Wayfair.com, with the state claiming the company should collect sales taxes on sales in the state.

Online merchants will have to carefully monitor where their orders are coming from because states such as Colorado and Louisiana now require retailers with online sales greater than $100,000 in their state to report the business to state tax authorities, said Scott Peterson, vice president of tax policy at Avalara Inc., which sells accounting software to online merchants.

The Supreme Court has ruled that states can charge online retailers sales tax, even if they don't have a physical presence in the state.

The decision provides clarity that could lead to Congress passing legislation to create uniform national rules for collecting state taxes, to avoid a hodgepodge of individual state rules that would make the tax collection especially onerous for small e-commerce businesses.

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The 5-4 opinion, "threw out a precedent that had blocked online sales taxes", Axios explained.

At issue was the court's 1992 decision in Quill v.

Quill was a catalog (not e-commerce) retailer that had no presence in North Dakota.

"With the appropriate action by the Legislature and Florida Department of Revenue, not only will the state be able to collect the sales and use tax that has always been legally due, but Floridians will no longer be unknowingly breaking the law".

Corporate giants like Minnesota-based Target and Best Buy are also rejoicing, alongside the local business community.

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Yet a majority of the states say they are losing billions in revenue, and they are supported by many large, so-called brick-and-mortar retailers like Wal-Mart that do pay sales tax, regardless of whether their sales are done in stores or online. Expected to generate more than $24 billion for the state government in the current fiscal year, the sales tax is the single largest source of funding for the state.

In Massachusetts, you don't have to pay the 6.25% sales tax on clothing and food, but you do for luxury items like jewelry. Five states don't charge sales tax. Justices Ruth Bader Ginsburg, Clarence Thomas, Samuel Alito and Neil Gorsuch joined his opinion. "Big victory for fairness and for our country".

"We are a state, we're most famous for having one of the most complicated and quite frankly, screwed up sales tax systems in the United States", McCarthy said.

The Massachusetts law went into effect, but was challenged in court by a company, Crutchfield Corporation, which said it violated federal law. Other retailers-including Etsy, eBay, and Wayfair-are also seeing huge stock dips.

But NetChoice, a trade association for e-commerce firms, warned small businesses would have trouble complying with the different tax requirements in each state.

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