Tax opinion

21 Jun 2018 By Richard Beales Follow @richardbeales1

The Supreme Court scrapped precedent and said states can force retailers to collect levies on sales to residents even if the sellers aren’t physically present. States will regain a tax base eroded by geographical arbitrage and the internet – two causes of worldwide tax tensions.

This content is for Subscribers only

Context News

U.S. states may force online retailers to collect potentially billions of dollars in sales taxes, the country’s Supreme Court said in a major ruling on June 21 that undercut an advantage many e-commerce companies have enjoyed over brick-and-mortar rivals.

In a 5-4 ruling upholding a South Dakota law challenged by Wayfair, Overstock.com and Newegg, the justices overturned a 1992 high-court precedent that had barred states from requiring businesses with no “physical presence” in the state where the sale took place, like out-of-state online retailers, to collect sales taxes.

At 2:13 p.m. EST, shares of Overstock.com had fallen 5.6 percent to $36.75. Shares of Wayfair were down slightly.

Email a friend

Please complete the form below.

Required fields *