Why the Online Sales-Tax Ruling May Have Limited Impact

High Court Online shoppers can be forced to pay sales tax

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The Retailers Association of MA called the ruling a big win for businesses.

The top court in the USA has ruled that states can force online companies to collect sales tax from their customers.

The Supreme Court just voted to close a loophole that has seen American consumers dodge billions in sales tax on online orders since 1992. Trump tweeted. "Big victory for fairness and for our country".

Shopping centers, department stores and major retail outlets have laid off thousands of workers and are struggling to remain open as consumers turn to internet home delivery for an ever-increasing array of goods and services.

A decision Thursday from the U.S. Supreme Court could mean increased revenue for Kentucky. States were missing out on around 25 percent of the tax from online sales, according to the Government Accountability Office, meaning $13 billion in missed sales. "We think that incentive, that carrot if you will, is strong enough to clean up our state and local sales tax codes", McCarthy said.

The court chose to overturn a 1992 decision that a physical presence was necessary to require retailers to collect and send sales taxes to a state.

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Justice Anthony Kennedy wrote that the previous decisions were flawed.

Many e-commerce giants like Amazon and Walmart already collect sales tax because they're so big they have a large enough presence throughout various states to collect sales tax.

But even with the court's decision, not all remote sales are likely to be taxed.

"The Indiana Chamber has been a long-time advocate for online sales tax collection; it is one of the key goals in our Indiana Vision 2025 plan". This was due to 50 years' worth of legal rulings which prevented states from charging sales tax on purchases made from out-of-state retailers. "For years, this situation has resulted in substantial loss of revenue to states, thus increasing the tax burden on those who do pay the taxes they owe".

"Local sellers are going to be protected, said Jon Hearst, President of the Retailers Association of MA". However, this only applies to items from its own inventory, not those from third-party sellers.

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