Supreme

Online shopping will become more expensive soon, as the U.S. Supreme court ruled Thursday that states can enforce internet retailers to collect sales taxes, even if they don’t have a physical presence in the state, reports CNN Money.

The 5-4 decision was a victory for South Dakota, which had asked the court to uphold its recently passed law imposing an internet sales tax, and it 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 like Wayfair, which brought the suit.

The court, in a ruling authored by Justice Anthony Kennedy, revived a 2016 South Dakota law that required larger out-of-state e-commerce companies to collect sales tax, a mandate that the online retailers fought in court.

Other large online retailers like Amazon and Wal-Mart, already collect sales taxes due to their large physical presence in each state to qualify as taxable by states, however, many smaller players, such as Overstock.com and Wayfair, don’t have enough widespread operations to be subject to state taxing authority, giving them a price advantage over traditional brick and mortar businesses.

According to the General Accountability Office, prohibitions against collecting sales taxes from online retailers cost states as much as $13.4 billion last year.

For the full story, head on over to CNN Money.

Words by Renz Ofiaza
Staff Writer

scribbling by day, architect by night

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