The Supreme Court just handed down a decision in South Dakota v Wayfair, Inc. that states can force online retailers to collect sales taxes from purchases. That ruling held that a state can not require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods the seller ships to consumers there. "Now everybody is going to be collecting sales tax whether you order from Amazon or anywhere online".
The South Dakota law challenged in the case provided that a business having $100,000 in annual gross sales in South Dakota, or conducting 200 business transactions in South Dakota, needed to collect South Dakota's sales tax on those sales or transactions.
You'll have to pay up if the state you live in passes laws that require online retailers to collect sales tax, says Joseph Bishop-Henchman, the executive vice-president of the Tax Foundation.
The National Retail Federation trade group has hailed the Supreme Court's sales tax decision as a "major victory". It may be hard and costly for Kadlubeck to comply as many states will demand that online sellers in other states collect sales tax from buyers in their states.
States also still must announce dates by which retailers must be in compliance, says Scott Peterson, a vice president at Avalara, a manufacturer of tax collection software. As the court opinion notes, online retailers from out of state essentially offer lower prices because so few consumers voluntarily pay the sales tax themselves. One leading voice in that argument, eBay, says many small online businesses will be forced to close.
Sales tax collection in Florida already has been evolving. "With our state's growing economy, I don't want to reach into West Virginians' pockets when we don't need to", he said.
"We've been trying to phase out the sales tax on food so this gives us an opportunity to work on different parts of Tennessee's overall tax structure". Oklahoma has benefited to the tune of about $25.9 million, he said, while OKC has seen an increase of $4 million and Moore has netted about $320,344 in additional taxes. Shirzay believes the verdict will "level the playing field a little bit more" between online and offline retailers.
In a statement by Rauschenberger, there will be criteria businesses have to meet before they are required to collect sales tax for the state.
Carl Davis, research director for the Institute on Taxation and Economic Policy, a non-partisan think tank, told Business Insider the Trump Store's sales tax collection policy is "a textbook example of the problem that this ruling is meant to address". "The governor looks forward to working with members of the state legislature to decide how best to implement this change in the law in a way that is fair to the taxpayer, while respecting both brick and mortar businesses and e-retailers". That essentially shifts more of the tax burden and the responsibility for funding government functions from public education to social services to Floridians who buy locally and away from those who buy online.
Walls think people understand the importance of keeping brick and mortar businesses for our communities.
Estimates have North Dakota bringing in as much as $20 to $50 million in sales tax now that the rules have changed.