The Florida Retail Federation, which has long tried without success to get the Legislature to address the issue, hailed Thursday's decision.
"Local sellers are going to be protected, said Jon Hearst, President of the Retailers Association of MA".
Whatever lawmakers do, don't assume that the imposition of online sales taxes will sink e-commerce. Other states looking to tax internet sales will also likely have to exclude small businesses in order to withstand legal scrutiny.
The ruling, which overturned two decades worth of precedent, gives states wide latitude to implement their own rules about collection. The South Dakota law only applied the tax to online retailers that had at least $100,000 of annual sales in the state or 200 individual transactions. While the Supreme Court spoke approvingly of the law, it sent it back to South Dakota's highest court to be revisited in light of the court's decision. The Retailers Association of MA called the ruling a big win for businesses. Justice Anthony Kennedy, who is largely credited for sparking the legal challenge, noted that in when Quill was originally decided there was $180 million in e-commerce sales versus $453.5 billion in retail e-commerce a year ago. Online retailers sued over the scheme, and the Supreme Court allowed the case to proceed. Now, rivals will be charging sales tax where they hadn't before. The results were published in the April 1 issue of BRAIN.
Many retailers, such as Amazon, Apple, Walmart, and Target, were already collecting sales taxes even if they didn't have a brick-and-mortar retail space in a state. Online sellers that haven't been charging sales tax on goods shipped to every state range from jewelry website Blue Nile to pet products site Chewy.com to clothing retailer L.L. Bean.
"These very brick-and-mortar retailers are the ones who employ one in four South Carolinians", Lindsey Kueffner, head of the state's Retail Association, said in a statement Thursday. Kennedy said that position was archaic, "unsound and incorrect" in the internet age. The Supreme Court heard arguments in the case in April. Online sales comprised more than 9% of total sales in the U.S. And, if some small businesses with only de minimis contacts seek relief from collection systems thought to be a burden, those entities may still do so under other theories. He said the legislation would be tailored to fit within the Supreme Court ruling.
Louisiana, Tennessee, South Dakota, Oklahoma and Alabama all stand to reap the highest gains as a percentage of their current revenue, the research found.
That said, South Dakota's tax system includes several features that appear created to prevent discrimination against or undue burdens upon interstate commerce.
Now, as internet sales grow - they reached $123.7 billion in the first quarter of 2018, up nearly 4 percent over the previous quarter, according to the U.S. Department of Commerce - the court has made a different decision, citing studies that suggest states lose out on up to $33.9 billion a year in uncollected online sales taxes.
Many would be surprised to learn that a "use" tax is already technically required on all out-of-state online purchases.
"If it's an internet sales, in the past, the person's been responsible".