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Tax-Free Internet Sales Are Now Dead

Tax-Free Internet Sales Are Now Dead

Tax-Free Internet Sales Are Now Dead

Thursday's ruling involves a dispute between the state of South Dakota and Boston-based Wayfair Inc., along with other two other online sellers, Overstock.com Inc. and Newegg Inc.

The win was welcomed by groups representing brick-and-mortar retailers and decried by e-commerce advocates. North Dakota, that states could not extend their taxing authority to companies that had no stores, warehouses or "physical presence" within the state. They said a decision in a case involving mail-order catalogues is obsolete in an era of e-commerce.

"Consumers will quickly feel the negative effects as those businesses dry up or are forced into the arms of Internet giants", he added.

Retailers said overturning Quill would allow states to go far beyond the model legislation that South Dakota passed, requiring collection by retailers with a single sale in a state or perhaps trying to force the companies to comply retroactively. The law could yet face legal challenges on other grounds, Kennedy noted.

B&H doesn't require that buyers pay sales tax if they place orders outside of NY or New Jersey, and while you're supposed to later pay those uncollected funds when tax time comes around, the vast majority of people don't.

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After states and traditional retailers have grumbled about this situation for years, South Dakota finally chose to do something to change it.

President Donald Trump has also criticized Amazon, whose founder Jeff Bezos also owns the Washington Post, saying that it does not collect any sales tax.

States like South Dakota that depend heavily on sales taxes for their revenue are likely to benefit most, with a predicted maximum revenue increase of around 3 percent, according to a Barclays research note.

Kennedy wrote that the 1992 precedent that affirmed that a physical presence is required - a case called Quill v.

The 5-4 ruling strikes down a decades-old decision that impacted online sales; clearing the path for local governments to charge sales tax on goods regardless of whether or not the business has a "physical" footprint within its boundaries.

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