AL governor, retail association praise SCOTUS online sales tax ruling


The US Supreme Court. Jim Watson AFP Getty Images

According to the General Accountability Office, prohibitions against collecting sales taxes from online retailers cost states as much as $13.4 billion past year.

"Remote sellers will be required to collect and remit sales tax to North Dakota only if they make a minimum of either 200 sales or $100,000 in sales per year in North Dakota, even if they don't have a physical presence here".

The US Supreme Court just upended 26 years of tax law by overturning a ruling that had blocked states from collecting sales taxes for all online purchases.

In a 5-4 decision, the court ruled in favor of the state of South Dakota, which asked the court to uphold a new law imposing an Internet sales tax.

Shops and retail chains have argued for years that existing sales tax rules encourage customers to do their shopping online, where they can avoid paying that tax.

In a statement issued Thursday, Fox said the court's order will be bad for Montanans buying products online from other states, as well as small business selling online outside the state.

The order from the Supreme Court strikes down previous rules that said states could not collect sales tax from a business if that business did not have a physical presence in the state.

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Chief Justice John Roberts offered the dissenting opinion, along with Justices Stephen Breyer, Elena Kagan, and Sonia Sotomayor.

A "quarter century of experience has convinced me" the Supreme Court's earlier decision was no longer justified, he wrote, adding that it was "never too late" to arrive at a better position.

Retail trade groups praised the ruling, saying it levels the playing field for local and online businesses. The ruling is "a big, big victory" for them and was a "good decision", President Donald Trump told governors at the White House. Because many e-commerce companies do not collect state sales taxes on purchases, they have had an advantage over brick-and-mortar businesses that do collect it.

Shoppers were generally supposed to pay the sales tax to the state themselves, but most didn't, says Gerald Storch, who was CEO of department store operator Hudson's Bay and now runs a retail consulting firm. and some other online retailers began collecting the 6 percent sales tax from MI in October 2015 under the state's Main Street Fairness Act. It will also directly affect sellers hocking their goods on Amazon.

Internet companies opposed to the South Dakota law appealed.

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