Supreme Court’s sales-tax ruling could mean $200 million for IL

Supreme Court’s sales-tax ruling could mean $200 million for IL

Some major online retailers, such as Amazon, have already agreed on their own to collect sales tax nationwide.

The majority of USA states collect some sales tax on retail purchases, typically charging customers between 4% and 8% for each transaction. For example, the popular electronics seller B&H only charges sales tax in NY and New Jersey, where it has a physical presence.

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 US exchanges. Amazon shares closed down 1.1 percent.

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

- A Supreme Court ruling is making shopping on the internet more expensive.

"This is a great day for South Dakota".

While this ruling is beneficial to state governments, it stands to have a negative impact on retailers and consumers alike. The law makes an exception for companies with less than $100,000 in annual sales or 200 transactions in the state, seeking to help smaller retailers compete with big e-commerce incumbents. Any adjustment to those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress. The Supreme Court decision clears the way for states to unwind that competitive advantage.

Roberts said he agreed that a 51-year-old case partly affirmed by Quill was wrongly decided, but he opposes discarding the physical presence rule because the internet economy has grown in reliance on it.

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The court decision could also be important in Florida because of the state's heavy reliance on sales-tax revenue. "That should be a message to the states", Heitkamp told Reuters.

Any near-term confusion would likely peter out as customers get used to the change, but it will likely be a bigger deal for other only-online stores like Etsy, Ebay, and Overstock.

"To some extent, the marketplace already addressed this problem", Reames added.

Jeffrey LeSage, Americas vice chairman for tax at accounting firm KPMG, said the ruling "could turn out to be nearly as significant for American businesses as the recent rewrite of the US federal tax code".

"Startups and small businesses may benefit from the physical presence rule, but here South Dakota affords small merchants a reasonable degree of protection", the ruling says.

In 2015, Justice Kennedy suggested that it was time to reopen the case, and said that the "legal system should find an appropriate case for this court to re-examine [the issue]".

Many bike retailers do some e-commerce to complement their brick-and-mortar sales.

"Consumers will quickly feel the negative effects as those businesses dry up or are forced into the arms of Internet giants", said Chris Cox, NetChoice outside counsel.

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