Why the Online Sales-Tax Ruling May Have Limited Impact

Supreme Court closes online sales tax loophole

Supreme Court closes online sales tax loophole

The U.S. Supreme Court's decision on online sales tax is viewed as a victory for states, but those with aggressive collection policies, such as NY and California, could be challenged by online retailers.

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.

Soon after the South Dakota law passed, South Dakota took it to court with retailers Newegg, Wayfair and Overstock, alleging that the companies failed to comply with their state sales tax laws. 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.

If you're a big Amazon.com shopper, and live in one of the 45 states with a sales tax, you likely already pay sales tax on some orders.

Nebraska lawmakers came close to passing a bill this year that would have required state revenue officials to start collecting sales taxes from online retailers.

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But when and if that happens depends on the state: Some may pass laws quickly, others can take years and some states, like the ones that don't have a sales tax, may choose not to require it, says Bishop-Henchman.

In addition to being a win for states, the ruling is a win for large retailers, who argued the physical presence rule was unfair. Kennedy also noted the existence of software that "may make it easier for small businesses to cope" with compliance.

"This decision is not the end of the days for this case", said Jamie Yesnowitz, a National Tax Office leader at accounting firm Grant Thornton.

Second, Hawaii is not a member of the Streamlined Sales Tax Agreement and can not be a member unless its laws are amended significantly.

"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.

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While Zara's shops are ubiquitous, its Spanish parent company, Inditex SA, typically tries to stay out of the limelight. As images of Mrs Trump surfaced online, social media was swamped with users in disbelief over her choice of jacket .

The tax compliance software and services are created to work with the programs retailers use to process their sales transactions.

"The Trump Store has been a clear victor under what the court just labeled 'a judicially created tax shelter, '" Davis said.

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

"One report says West Virginia stands to have the second-biggest gain on a percentage basis in the country by collecting on online sales", he said.

"What this really does is it provides some fairness and equality to your local merchants". That essentially shifts more of the tax burden and the responsibility for funding government functions from public education to social services to Floridians who buy locally and away from those who buy online. But the promise of additional revenue from online sales taxes may push more states to join.

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Additionally, it plans to cut general and administrative costs, and has hired a consultant to help in this area. Analysts had expected same-store sales to grow 3% in that period.

In total, 38 states have considered and 15 enacted, measures aimed at collecting remote sales taxes since 2016.

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