Supreme Court sales tax ruling to make online shopping more expensive

Supreme Court rules states can force online retailers to collect sales tax

The Florida Retail Federation, which has long tried without success to get the Legislature to address the issue, hailed Thursday's decision. "I again call on Congress to level the field for small businesses and retailers in Oklahoma and across the country by implementing a fair system for online sales tax". Estimates are projecting states and local governments could pull in $8 billion to $23 billion a year in revenue. Now, thanks to a US Supreme Court ruling (PDF) on Thursday, they have to.

A 5 to 4 ruling from the Supreme Court will change that, but Kevin McCarthy with the Arizona Tax Research Association says the impact won't immediately be felt in Arizona. For example, the popular electronics seller B&H only charges sales tax in NY and New Jersey, where it has a physical presence.

The court chose to overturn a 1992 decision that a physical presence was necessary to require retailers to collect and send sales taxes to a state.

So the nation's highest court took another look at the matter and overturned its earlier ruling.

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Some online retailers have already been collecting some state taxes.

"If I'm a remote seller before this decision the fact that Oklahoma has a statute doesn't mean I have to do anything, because Oklahoma statute, under the supremacy clause of course, does not trump the Supreme Court's determination", Crosby said.

In turn, the US Government Accountability Office (GAO) said that sales taxes may generate $ 13 billion in revenues to local budgets.

The court decision could also be important in Florida because of the state's heavy reliance on sales-tax revenue.

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He said the ruling was "good news, but it's not a windfall".

The online stores have contended that charging sales tax would be "burdensome" for small- to mid-sized shops.

"States struggling with rising health care and pension costs will welcome the additional tax revenue, which in effect represents revenue otherwise lost from brick-and-mortar stores", S&P added. "It automatically made the playing field unlevel for those entities that are here in the state doing business and participating in our community".

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