In a 5-4 vote, the U.S. Supreme Court chose to reverse a 26-year-old decision saying that all states can now require internet retailers to collect sales and use tax in states where they lack a physical presence. IN supported the legal challenge led by South Dakota. With the courts ruling, internet companies can now be required to collect states sales tax in states where they don't have a physical presence. Of course, a lot has changed since the fledgling days of the internet 26 years ago. Amazon stock is down over 1.2%.
The 1992 decision, the court found, was "unsound and incorrect", and unfairly penalized traditional brick-and-mortar retail outlets.
States have long complained that they were losing millions in tax revenue, while giving online retailers an advantage over brick-and-mortar shops. The NRF had argued in a friend-of-the-court brief past year that there's a wide variety of software available to automatically collect the sales tax owed.
Governor Eric Holcomb said he wants to take a look at what the ruling will mean for IN, and the taxes collected here.
"That's who the internet has benefited and that's who this new ruling will hurt the most".
"Retailers have been waiting for this day for more than two decades", said NRF president and CEO Matthew Shay.
"E-commerce has grown into a significant and vibrant part of our national economy against the backdrop of established rules, including the physical-presence rule", he wrote.
"As a regional destination for working, eating, entertainment, and shopping, sales tax revenue is a major part of how we operate our government and improve our community", said Chris Floore, assistant to the county manager for public affairs for Macon-Bibb County.
Shopping online is about to get more expensive.
As reported by CNET, the National Retail Federation, a trade group that includes numerous largest brick-and-mortar USA retailers, joined President Trump in hailing the decision as "a major victory". Small businesses may have to figure out how to comply with various state sales tax laws, though there are software options to help.
States were eager to collect the estimated $13.4 billion in annual revenue they could potentially glean from charging online sales taxes. Out-of-state sellers that meet minimum standards can be required to charge, collect and remit sales tax.