Published: Mon, April 16, 2018
Finance | By Claude Patterson

Supreme Court To Rule On Sales Tax Of Online Purchases

Supreme Court To Rule On Sales Tax Of Online Purchases

Many small retailers depend on online sales.

Amazon and Walmart, two of the giants of online retailing, collect sales tax on all their sales in the 45 states that have a statewide sales tax.

In fact, chances are pretty good that you already pay sales tax on at least some of your online purchases if you live in a state that has sales tax.

Times and technology have changed. But online-only merchants-especially the large number of independently-owned businesses on sites like Etsy and Ebay-worry that this is more of a cash grab by state and local governments.

South Dakota sued top online retailers Wayfair, Overstock, and Newegg, for failing to comply to the said state tax law.

But numerous sales these small retailers get are through bigger sites like Amazon and Walmart. South Dakota and other state and local governments say they've been cheated out of billions of dollars because of this rule.

If it's reversed, that could mean all online retailers have to collect taxes everywhere.

The Trump administration, for its part, has chimed in on the matter, arguing in favor of requiring online retailers to pay sales tax.

"Online retailers are omnipresent today - on consumers" smart phones, laptops, tablets, and computers - in a way that was inconceivable in 1967 or 199", she continued.

Small retailers are not collecting state taxes from online shoppers unless the store has a physical presence in the state where the buyer lives.

Those opposed to a re-write of the law warn that the cost to small businesses could be too much to bear. However, GAO also estimated that untaxed online sales would make up just 2 to 4 percent of state and local sales tax revenue.

In the said case, South Dakota state attorneys asked the High Court to review if retailers can be required to collect state taxes in states where they lack physical presence.

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