Supreme Court closes online sales tax loophole

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Online sellers of expensive items like furniture and jewelry could see a diminished advantage over brick-and-mortar rivals that collect sales tax.

Today's ruling doesn't require states to collect sales tax-they nearly certainly will if they weren't already-but today's ruling won't' change anything immediately.

"It certainly clears up any confusion, clears up some of the rhetoric", said Rep. Jay Kaufman, D-Lexington, chairman of the Committee on Revenue.

"Retailers have been waiting for this day for more than two decades", said NRF's president and CEO, Matthew Shay.

The Supreme Court says states can force online shoppers to pay sales tax.

"Any state with sales taxes already has some sort of variance when it comes to exemptions and reporting rules", he said.

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The US Supreme Court ruled Thursday that American states had the right to tax internet sales of goods and services.

In truth, this doesn't have much impact on Amazon, which has been collecting sales tax across the country since past year. In South Dakota alone, a state with a population of less than 1 million people, The Department of Revenue estimates that the state government could take in up to $58 million annually. Newly-public sales tax automation company Avalara saw its shares spike 30 percent immediately following the ruling.

The decision is largely viewed as a victory for states and local businesses. "If you're buying online from Walmart or Target, you're still paying sales taxes".

MA law was similar to laws in several other states.

The Illinois provision mirrors the South Dakota law at the center of the Supreme Court case, and is scheduled to go into effect on October 1. Representatives of the state argued that the rule needed to be reconsidered in the age of online shopping.

The Florida Retail Federation, which has long tried without success to get the Legislature to address the issue, hailed Thursday's decision.

Supreme Court rules states can force online retailers to collect sales tax
Sellers who use eBay and Etsy , which provide platforms for smaller sellers, also haven't been collecting sales tax nationwide. Lawmakers in the state, which has no income tax, passed a law created to directly challenge the Supreme Court's 1992 decision.

Castro said she was "quite content" with the court's decision, calling it a "huge win for our small businesses who really struggled to compete".

Kaufman said he does not anticipate any legislative action either.

The case, which we first told you about in April, was over a South Dakota law which requires retailers, regardless of where they are, to collect and pay sales tax.

For those who tend to patronize the biggest retailers, the ruling may not make much of a difference.

He noted that it could apply not only to behemoths like Amazon and eBay but smaller businesses, like a machining company that sells parts online. E-commerce giant Amazon has collected sales tax from IL shoppers since 2015.

Supreme Court Justice Anthony Kennedy had seemed sympathetic to the states' plight, and he essentially invited the South Dakota case in 2015 in Direct Marketing Association v. Brohl. Online sellers that haven't been charging sales tax on goods shipped to every state range from jewelry website Blue Nile to pet products site Chewy.com to clothing retailer L.L. Bean.

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