What the Supreme Court sales tax ruling means for New Yorkers


The suit (South Dakota v. Wayfair) was brought by 40 states that claim the old rule had cost them billions in lost tax revenue. It has to do with the way states collect taxes from internet sales.

On June 21, the US Supreme Court overturned a 26-year ban on levying online sales tax, satisfying South Dakota's complaint of an outdated ruling that had made much of the internet a tax-free zone. The ruling reversed a 1992 court decision that held online retailers could only be required to collect and remit sales taxes if they had stores or some other "nexus" in states.

Dissenting from the decision, Chief Justice John G. Roberts Jr. wrote: "E-commerce has grown into a significant and vibrant part of our national economy against the backdrop of established rules, including the physical-presence rule".

Last year, third-party sales earned Amazon almost $32 billion across the globe, according to SEC filings, and the business is growing rapidly.

South Carolinians soon could pay more to shop online after the U.S.

The Auto Care Association applauded the Supreme Court's decision, saying online sellers will now be on a level playing field with brick and mortar retailers regarding charging sales tax.

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Previous rulings limited a state's ability to collect that revenue if the business didn't have a physical presence in the state.

The Supreme Court called this a simple and fair solution to create fair tax rules for states. As a result, Taylor sees tax revenues increasing gradually by about $13 billion.

Big chains have been collecting sales tax nationwide because they typically have physical stores in whatever state a purchase is being shipped to.

"You've got to have a modern sales tax, so we don't have to have any other kind of tax that people don't want", Calabro said. "It will take time to pass implementing legislation, and the additional revenue will represent a relatively small portion of overall state and local revenues".

Nonetheless, the ruling is a big win for brick-and-mortar retailers, who have railed for years against the unfair advantage given to internet retailers by avoiding sales tax.

The court decision was praised by Florida business groups.