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Thursday March 28, 2024

Top US court gives states broad rights for online sales tax

By AFP
June 22, 2018

WASHINGTON: The Supreme Court ruled Thursday that US states have broad rights to tax online sales of goods and services, reversing its own decision 25 years earlier at the start of the internet era. The nine justices split 5-4 in overturning a prior decision by the top US court that had held that a state can only tax sales by businesses that have a physical presence in that state. Thursday’s ruling could have a major impact on both the online and brick-and-mortar retail sector and give states the ability to shore up public coffers with sales tax revenues from e-commerce. The decision, in which South Dakota prevailed over the online furniture retailer Wayfair, immediately sent ripples through the internet shopping industry sending shares tumbling in Amazon, eBay, Etsy and others. South Dakota’s case was supported by 35 states and the federal government and saw the Supreme Court undo a 1992 ruling in which it had held that the mail-order company Quill did not have to collect sales taxes in North Dakota.