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Supreme Court ruling could make way for billions in online sales tax revenue
Eli Dile   on Wednesday, March 14, 2018 at 12:00:00 am

The Supreme Court is set to hear a case that will determine whether states can collect sales tax from e-commerce companies. South Dakota vs. Wayfair Inc. challenges a 1992 Supreme Court ruling that prevented states from collecting sales tax from a seller that lacks a physical location in the state (Stateline). Arguments will be presented April 17, and a ruling is expected this summer.

Nine percent of all U.S. sales are done online, a figure that totaled $119 billion last quarter. Estimates of the windfall for the 45 states that have a sales tax range from $8 billion to $26 billion. Amazon voluntarily collects and hands over sales tax, but plenty of other online marketplaces do not.

However, only states with laws that specifically authorize taxation of online sales will be able to enforce collection of this tax, should the high court rule favorably. Nine states recently introduced such bills in their legislatures.

States have long argued the exemption for online retailers erodes their tax bases and puts brick-and-mortar businesses at a competitive disadvantage. The Marketplace Fairness Coalition – with members including the International Council of Shopping Centers and other retail associations – has called on Congress to pass federal legislation to ensure online sales are taxed.


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