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Supreme Court Rules States Can Require Online Retailers To Collect Sales Tax (npr.org)

Posted by msmash on from the breaking-news dept.

New submitter zippo01 shares a report: Online shopping will soon become more expensive after the U.S. Supreme court ruled Thursday that states can require internet retailers to collect sales taxes. The 5-4 decision broke with 50 years' worth of legal rulings that barred states from imposing sales taxes on most purchases their residents make from out-of-state retailers. The decision was a victory for South Dakota, which had asked the court to uphold its recently passed law imposing an internet sales tax. "Our state is losing millions for education, health care and infrastructure, and our citizens are harmed by an uneven playing field," said Marty Jackley, South Dakota's attorney general.

6 of 428 comments (clear)

  1. Strange SCOTUS Vote by PopeRatzo · · Score: 4, Interesting

    The vote breakdown on this decision was really weird. Voting in favor of requiring online retailers to collect sales tax were Justices Kennedy, Alito, Thomas, Ginsburg and Gorsuch. Justices Breyer, Sotomayor and Kagan joined Chief Justice Roberts in the dissent.

    I wonder if Trump ever foresaw his boy Gorsuch and Ruth Bader Ginsburg joining on a 5-4 decision.

    --
    You are welcome on my lawn.
    1. Re:Strange SCOTUS Vote by Solandri · · Score: 1, Interesting

      It's not so weird when you realize this case aligns those in favor of strong state rights (typically conservatives) with those in favor of strong government power (typically liberals).

      If Scalia had lived, the Court probably would've ruled 5-4 the other way. Scalia favored a strict interpretation of the Constitution, meaning in his opinion the clause prohibiting taxes on interstate commerce probably would've prevailed. Also, the side against sales taxes on Internet sales lost its biggest proponent several years ago, when Amazon entered into agreements with several large states to collect taxes there. Amazon didn't have a physical presence in those states so nexus didn't originally apply, but they had plans to put warehouses (and now lockers) in those states so probably agreed to collect taxes since they were going to gain nexus eventually. But once Amazon entered the agreements, they flipped from no to taxes on interstate commerce, to "if we have to collect these taxes then it'd be great if everyone else had to collect them too."

  2. Originalism by sjbe · · Score: 5, Interesting

    Remember this the next time Samuel Alito, Neil Gorsuch or Clarence Thomas talk about the following the original text of the constitution.

    Heh... Yes this is a solid example of why originalists are so full of shit. It's almost always an excuse to justify some sort of behavior that is abhorrent under current social norms or to try stem the tide of political change that some people (usually conservatives) disapprove of. Originalists tend to ignore this principle when it is convenient for them but shout loudly about it when it helps whatever cause they are pushing at the time.

    In this case internet commerce has changed the game dramatically and the laws were written in an earlier era with different circumstances. I haven't looked closely enough at this case to decide whether I agree with the decision but it seems clear enough that the old understanding regarding sales tax collection between states no longer makes much sense in the internet era. Change has to happen one way or another so such a decision isn't surprising even if it ultimately turns out to be a poor one. Maybe this will force Congress to actually address the elephant in the room and establish a new framework for States to collect sales tax that makes sense. (Dare to dream...)

  3. Re: "Our state is losing millions for education... by superdave80 · · Score: 3, Interesting

    You will also need a table that lists every item to determine if it is taxable or not. Every 'item' is not taxed the same in every state/county/city. This table is going to get really, really big...

  4. Re: "Our state is losing millions for education... by Dragonslicer · · Score: 3, Interesting

    And that needs to be implemented correctly by every online business with a presence in the US.

    Not necessarily. I'm fine with a state being able to collect sales tax on online purchases, but it's the state's responsibility to provide a simple mechanism that the seller can use to determine what the sales tax should be. A different API for different states would explicitly be considered not simple. There would have to be something like a web service hosted by e.g. the FTC, where the seller just submits address and item name/description and gets back the tax rate. If the state can't provide the necessary information, then they'll have to simplify their tax code before they can collect sales tax from online purchases.

  5. Re: "Our state is losing millions for education.. by Anonymous Coward · · Score: 2, Interesting

    I'm coming around on Trump. He's still an idiot, but he might not be an awful president.