Page 25 - ARUBA TODAY

BUSINESS Friday 22 June 2018
A25

High Court: Online shoppers can be forced to pay sales tax

By JESSICA GRESKO which said it was losing out
Associated Press on an estimated $50 mil-
WASHINGTON (AP) — lion a year in sales tax not
States will be able to force collected by out-of-state
more shoppers to pay sellers. Lawmakers in the
sales tax when they make state, which has no income
online purchases under a tax, passed a law designed
Supreme Court decision to directly challenge the
Thursday that will leave physical presence rule. The
shoppers with lighter wal- law requires out-of-state
lets but is a big financial win sellers who do more than
for states. $100,000 of business in the
Consumers can expect to state or more than 200
see sales tax being charged transactions annually with
on more online purchases state residents to collect
— likely over the next year sales tax and send it to the
and potentially before the state.
Christmas shopping season South Dakota wanted out-
— as states and retailers re- of-state retailers to begin
act to the court's decision, collecting the tax and sued
said one attorney involved several of them: Over-
in the case. stock.com, electronics re-
The Supreme Court's 5-4 tailer Newegg and home
decision Thursday over- goods company Wayfair.
ruled two, decades-old After the Supreme Court's
Supreme Court decisions decision was announced,
that states said cost them In this Oct. 10, 2017, file photo, the Supreme Court in Washington is seen at sunset. shares in Wayfair and Over-
billions of dollars in lost rev- Associated Press stock both fell, with Wayfair
enue annually. The deci- large retailers, who argued pet products site Chewy. Chief Justice John Roberts down more than 3 percent
sions made it more difficult the physical presence rule com to clothing retailer L.L. and three of his colleagues and Overstock down more
for states to collect sales was unfair. Large retailers Bean. Sellers who use eBay would have kept the court's than 2 percent.
tax on certain online pur- including Apple, Macy's, and Etsy, which provide previous decisions in place. South Dakota Gov. Den-
chases, and more than 40 Target and Walmart, which platforms for smaller sellers, "E-commerce has grown nis Daugaard called Thurs-
states had asked the high have brick-and-mortar also haven't been collect- into a significant and vi- day's decision a "Great Day
court to overrule them. stores, already generally ing sales tax nationwide. brant part of our nation- for South Dakota," though
The cases the court over- collect sales tax from their Under the ruling Thursday, al economy against the the high court stopped
turned said that if a business customers who buy on- states can pass laws requir- backdrop of established short of greenlighting the
was shipping a customer's line. That's because they ing out-of-state sellers to rules, including the phys- state's law. While the Su-
purchase to a state where typically have a physical collect the state's sales tax ical-presence rule. Any preme Court spoke ap-
the business didn't have a store in whatever state the from customers and send alteration to those rules provingly of the law it sent
physical presence such as purchase is being shipped it to the state. More than a with the potential to dis- it back to South Dakota's
a warehouse or office, the to. Amazon.com, with its dozen states have already rupt the development of highest court to be revis-
business didn't have to col- network of warehouses, adopted laws like that such a critical segment of ited in light of the court's
lect the state's sales tax. also collects sales tax in ahead of the court's deci- the economy should be decision.
Customers were gener- every state that charges sion, according to state undertaken by Congress," The Trump administration
ally responsible for paying it, though third-party sellers tax policy expert Joseph Roberts wrote in a dissent had urged the justices to
the sales tax to the state who use the site don't have Crosby. joined by Justices Stephen side with South Dakota.
themselves if they weren't to. The National Retail Fed- Breyer, Elena Kagan and The case is South Dakota v.
charged it, but most didn't Sellers that have a physi- eration trade group, said Sonia Sotomayor. The line- Wayfair, 17-494.q
realize they owed it and cal presence in only a the court's decision was up of justices on each side
few paid. single state or a few states a "major victory" but the of the case was unusual,
Justice Anthony Kennedy have been able to avoid group said federal legisla- with Roberts joining three
wrote that the previous de- charging sales taxes when tion is necessary to provide more liberal justices and
cisions were flawed. they shipped to addresses details on how sales tax Ginsburg joining her more
"Each year the physical outside those states. On- collection will take place, conservative colleagues.
presence rule becomes line sellers that haven't rather than leaving it to The case the court ruled
further removed from eco- been charging sales tax each state to interpret the on involved a 2016 law
nomic reality and results in on goods shipped to ev- court's decision. passed by South Dakota,
significant revenue losses ery state range from jew-
to the States," he wrote in elry website Blue Nile to
an opinion joined by Jus-
tices Clarence Thomas,
Ruth Bader Ginsburg, Sam-
uel Alito and Neil Gorsuch.
Kennedy wrote that the
rule "limited States' ability
to seek long-term prosper-
ity and has prevented mar-
ket participants from com-
peting on an even playing
field."
The ruling is also a win for