June 24,2018
the staff of the Ridgewood blog
Washington DC, US Supreme Court rules states can collect sales tax for online purchases nationwide . Online shoppers could find costs going up after the Supreme Court did away Thursday with a decades-old precedent limiting the ability of states to collect sales tax on certain out-of-state Internet purchases.
The 5-4 ruling called the current rules “unsound and incorrect.” The Court shot down the “physical presence” required .Currently, businesses shipping a product to another state where it does not have a “physical presence” — a store, office or warehouse — are not forced to collect that state’s sales tax.
The high court said that rule is outdated, “When the day-to-day functions of marketing and distribution in the modern economy are considered, it is all the more evident that the physical presence rule is artificial in its entirety,” Justice Anthony Kennedy wrote.
The current regulation “allows remote sellers to escape an obligation to remit a lawful state tax is unfair and unjust,” added Kennedy. “It is unfair and unjust to those competitors, both local and out of state, who must remit the tax; to the consumers who pay the tax; and to the states that seek fair enforcement of the sales tax.”
