U.S. Supreme Court Revisiting 1992 Ruling in order to Begin Collecting Internet Sales Tax
Multi State – The United States Supreme Court will revisit a 26 year-old ruling that has made the internet mostly a tax free zone in order to consider allowing state and local governments to collect billions of dollars in sales taxes from online retailers.
The original ruling was put into effect in 1992 but many are arguing that the ruling is now obsolete in the now e-commerce era.
According to the Government Accountability Office, if allowed to require sales tax from online and remote merchants, states and local governments could have collected up to an additional $13 Billion in sales taxes for 2017.
Online retailers, such as, Amazon.com Inc. will be affected by a new ruling. Amazon is already currently charging sales taxes when selling its’ own merchandise, however, almost half of Amazon’s sales are from third party retailers.
In the 1992 case ruling of Quill vs. North Dakota, it was determined that a mail order company can only be forced to collect sales taxes in states where the company has a physical presence.
In 2016, South Dakota passed a law with the idea of overturning the Quill decision. The law requires retailers with over $100,000 in annual sales to pay a 4.5% tax on purchases.
The court is expected to hear arguments in April with a ruling by the end of its’ nine month term in late June.
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