Death and taxes.
Today, the Supreme Court ruled in favor of allowing States to collect sales tax from online retailers. The decision strikes down a decades-old precedent that protected out of state retailers from having to contribute sales taxes to a state.
The 5-4 decision is also somewhat unique for the court, shaking up the usual political divide. The conservative justice Anthony Kennedy was joined by liberal justice Ruth Bader Ginsberg, as well as other conservative justices Samuel Alito, Neil Gorsuch and Clarence Thomas on the side for the ruling. Against, you had conservative chief justice John Roberts, along with liberal justices Stephen Breyer, Sonia Sotomayor and Elena Kagan. Roberts preferred Congress legislate a fix, instead.
Each year, the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the States.
Between targeted advertising and instant access to most consumers via any internet-enabled device, ‘a business may be present in a State in a meaningful way without’ that presence ‘being physical in the traditional sense of the term. A virtual showroom can show far more inventory, in far more detail, and with greater opportunities for consumer and seller interaction than might be possible for local stores.
It is unfair and unjust to those competitors, both local and out of State, who must remit the tax; to the consumers who pay the tax; and to the States that seek fair enforcement of the sales tax, a tax many States for many years have considered an indispensable source for raising revenue.
– Justice Anthony Kennedy
The decision was spurred on by a case in South Dakota, concerning Wayfair. The online retailer disputed the need to collect taxes for the state. While States stand to gain a ridiculous amount in revenue, it’s very hard to ignore the damage the ruling will likely do to smaller online businesses.
Source: NPR
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