Supreme Court Ruling on Sales Tax for Online Retailers

On Thursday, June 21, 2018, the Supreme Court ruled that “internet retailers can be required to collect sales taxes even in states where they have no physical presence”. Online shopping has become very popular in recent years because of the low prices, wide selection, and convenience but e-commerce also had the advantage of being tax-free in most cases. With the decision in South Dakota v. Wayfair, the Supreme Court has moved to close that loophole. This decision was a victory for brick-and-mortar businesses as well as states that have been missing out on tens of billions of dollars in annual revenue.

Here is what our retail specialist, Lynann Pinkham, has to say about the ruling:

“I think this new ruling will be beneficial to brick and mortar businesses. With online retailers being charged sales tax on all internet purchases, they will be competing on an even playing field. However, I am not sure it will increase brick and mortar traffic. I believe consumers use the internet because it is convenient and they are able to find product that is not sold in brick and mortar stores.  The sales tax they have to charge will just be factored in as a cost of business and they will discount products in another fashion to offer lower prices. Brick and mortar will still need to push heavily, especially to the younger generation and they will have to continue to offer discounts.

Of course this is a win for the states as they will collect more sales tax and hopefully put some of that money back into the economy.”

Read more in this article in The New York Times: