The Supreme Court ruled in a 5-4 vote that states have the authority to collect sales taxes from online retailers, even if they don’t have a physical presence in the state. In doing so, the justices closed a loophole that helped Internet sales to grow and also overturned 50 years of its own precedents that banned states from collecting sales tax from companies without such physical presence. The decision did not follow typical ideological decisions, with liberal justice Ruth Bader Ginsburg joining conservative justices. Continue reading Supreme Court Lets States Collect Sales Tax From E-Tailers

The Trump administration has joined numerous state officials entreating the Supreme Court to overrule a 1992 case that exempts online sellers from adding taxes to their prices. Arguments on the 1992 case, Quill Corp. v. North Dakota, begin next month. South Dakota is leading the group asking the court to overrule the precedent-deciding case; it is joined by 35 states, the District of Columbia, organizations representing retailers, and, now, the Trump administration. Opposing are catalog mailers and online sellers. Continue reading Trump Administration, 35 States Oppose Online Tax Exemption

Starting December 1, shoppers on Amazon will most likely have to pay sales taxes on goods purchased from third-party merchants, in addition to paying tax on those bought directly from Amazon. That’s because, on that date, at least some vendors will begin collecting taxes to receive partial amnesty from back taxes in almost half of the U.S. states, including Florida, New Jersey and Texas. The deadline for the partial amnesty deal is October 17, so it is not yet clear how many merchants will take it. Continue reading States Are Battling Sales Tax Loopholes for Amazon Vendors

The South Dakota Supreme Court has ruled that retailers selling goods over the Internet are not required to charge the state’s 4.5 percent tax. The court had examined an appeal brought by online retailers Overstock, Wayfair and NewEgg, which contested the state law that required any company doing more than $100,000 in online retail to collect sales tax. This ruling lays the foundation for an appeal to the U.S. Supreme Court, which can issue a final rule on this contentious issue that would impact retailers across the U.S. Continue reading Internet Tax Ruling Sets the Stage for Supreme Court Appeal

In March, South Dakota passed a new law requiring many out-of-state online and catalog retailers to collect the state’s sales tax, a challenge to a 1992 U.S. Supreme Court ruling on Quill v. North Dakota prohibiting states from doing exactly this. The regulation has already resulted in several lawsuits. If the law is not overturned, other states are likely to follow suit, levying similar Internet sales tax rules. The implications would be enormous if numerous states adopt these rules, likely forcing audits and new tax rules in thousands of jurisdictions across the nation. Continue reading South Dakota’s New Internet Sales Tax Law Spurs Lawsuits

States that want to collect sales taxes from out-of-state Internet e-tailers are tired of waiting for Congress to act. As a result, they’re passing state laws to do so. Alabama, South Dakota, Utah and 10 other states have passed legislation that directly contradicts the standing national law that states can only apply tax to businesses with brick-and-mortar locations there. State legislators are hoping that by challenging the existing law, they will spur litigation and force Congress to re-examine the issue. Continue reading States Push Web Tax, Hoping to Spur Litigation and Legislation

Chicago recently extended its 9 percent “amusement” tax — originally intended primarily for live shows and sporting events — to include an array of online services. Now, subscribers to streaming services such as Netflix, Xbox Live and Spotify are fighting back with a lawsuit that contends taxing such digital entertainment should be ruled illegal. The policy challenge in Chicago could prove significant to the larger media industry since its outcome could possibly shape how cities and states could tax parts of the Internet economy in the future. Continue reading Lawsuit Claims Streaming Tax on Digital Entertainment is Illegal

The U.S. Senate passed a bill on Monday that would subject online shoppers to state sales taxes. The 69 to 27 vote drew support from both sides of the aisle, but it is expected to face a greater challenge in the House from conservatives who view it as a tax increase. President Obama has expressed his support for the bill, which does not include businesses with less than $1 million in online sales. Current law stipulates that states can only require online retailers to collect sales tax on goods sold if the store has a physical presence in the state requiring the tax. Continue reading New Internet Tax Bill Passes in Senate, Moves to House

The proposed Marketplace Fairness Act — legislation designed to help states force online retailers to collect sales taxes — made it past its first procedural obstacle Monday evening when the Senate voted 74-20 to consider the proposal for debate and amendment. Some anti-tax activists have described the bill as a tax grab, potential bureaucratic nightmare and infringement on states’ rights, while others view it as a necessary step to save brick-and-mortar retailers. Continue reading E-Commerce: Internet Sales Tax Proposal Moves Forward

Some senators argued that implementing an Internet sales tax would be harmful to taxpayers, would be anti-business and would create a “bureaucratic nightmare.” Nonetheless, endorsement of Internet sales taxes onto a Democratic budget bill passed easily in the Senate last week by a 75 to 24 margin. The adopted amendment allows states to “collect taxes on remote sales,” ushering in the first national Internet sales tax. Continue reading U.S. Senate Votes in Favor of Levying Internet Sales Taxes