Shopping online? Now you will have to pay taxes

22 Juin, 2018, 18:41 | Auteur: Auguste Feret
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Under the court's ruling, states will be able to force more people to pay sales tax when they make online purchases.

Critics of the decision said it would unduly burden and harm small businesses, which the majority acknowledged was possible. Jeanne Shaheen said in a statement.

In the interim, many states tried in various ways to get around Quill to collect sales taxes, with some success. States could enact minimum sales thresholds for triggering the online tax collection. "Twenty-three percent of Etsy sellers surveyed stated that they would stop selling to places in which they would incur such an obligation; five percent of sellers said they would close their businesses altogether".

Since Amazon has a local presence in most states, in fact, it has been collecting sales taxes for customers located in the 45 states that actually collect them since April 2017.

In his dissent, Chief Justice John Roberts wrote that Congress, not the court, should change the rules if necessary.

States lost out on $17.2 billion in sales tax in 2016 because of these loopholes, reported the National Conference of State Legislatures. That has long meant cheaper online purchases with no sales tax to pay, especially on big-ticket items.

Others warned that the ruling would cripple small businesses.

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Today's ruling caused publicly traded e-commerce companies share prices to tumble, with Shopify, Etsy, Amazon, eBay, Alibaba all recording losses in midday trading on their respective USA exchanges.

Amazon's stock is down almost a percent since the announcement, Etsy is down 3.12 percent. Amazon was among the biggest drags on the benchmark S&P 500 stock index. South Dakota law, the focus of the court ruling, requires online retailers with more than $100,000 in annual sales to collect taxes.

The Supreme Court ruled 5-4 in favor of South Dakota.

The win was welcomed by groups representing brick-and-mortar retailers and decried by e-commerce advocates.

Indeed, Justice Gorsuch once called the current system "a judicially created tax shelter". While retailers were not required to collect sales tax, that tax was technically still owed.

The Trump administration backed South Dakota in the case, arguing that no one could have foreseen how rapidly e-commerce would expand. The law could yet face legal challenges on other grounds, Kennedy noted. For example, the popular electronics seller B&H only charges sales tax in NY and New Jersey, where it has a physical presence.

And the state would likely see a $20 million per year revenue boost by levying such a tax, according to a Legislative Finance Committee analysis. That will open the door to more states passing laws similar to South Dakota's. "The largest physical retailers are now also the largest online retailers". North Dakota case in South Dakota v. Wayfair.


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