Industry

Supreme Court ruling could have huge impact on Texas economy

Supreme Court ruling could have huge impact on Texas economy

The U.S. Supreme Court ruled today that states and local governments are able to collect sales taxes from online retailers that aren't charging them.

Today's ruling overturns a decision from the Court in 1992 that paved the way for the explosion of online retail in the United States.

U.S. Supreme Court is seen in Washington, U.S. April 24, 2018.

State Sen. Dan Watermeier of Syracuse, who sponsored the legislation, expressed frustration about the delay.

Shopping online is about to get more expensive. "It's exciting to have it overturned, but it's disappointing to not have a law in place". This system standardizes taxes to reduce administrative and compliance costs: It requires a single, state-level tax administration, uniform definitions of products and services, simplified tax rate structures, and other uniform rules.

On June 4, the last day of the special second session, Louisiana legislators rushed through a bill that used the same wording as a South Dakota law that was the subject to the constitutional challenge in the high court. The decision was also having an impact on states' bottom line, Kennedy said, citing estimates that states are losing $8 billion to $33 billion a year in sales tax revenue.

"There are nuances to every opinion", he said.

"Big Supreme Court win on internet sales tax - about time!"

He said the ruling was "good news, but it's not a windfall".

That's even though Floridians already are technically supposed to pay sales tax on online purchases.

For this case, South Dakota v Wayfair Inc., Justice Ruth Bader Ginsburg joined Justices Samuel Alito, Neil Gorsuch, Anthony Kennedy, and Clarence Thomas to deliver the majority opinion.

Brick-and-mortar retailers cheered the decision. A "physical presence" could count as a store or headquarters, or other facility.

But sellers that only have a physical presence in a single state or a few states could avoid charging customers sales tax when they're shipping to addresses outside those states.

Floyd County businesses must collect a 7-percent sales tax, with 4 percent of that earmarked for the state.

Shares of eBay Inc and Etsy Inc, which both provide platforms for small retailers to sell their wares, were off 3.2 percent and 1.4 percent, respectively.

"Will states step forward and pass laws similar to South Dakota?" asked Annette Nellen, director of the Masters in Science in Taxation program at San Jose State University, on Thursday.

On Thursday the Supreme Court reversed more than half of a century of precedent.

Some popular "e-tailers" already collected at least some state sales tax. Furthermore, because most of the larger catalog and online retailers are based in Florida and Pennsylvania-two states with no tax on cigars-the move to collect additional taxes would be dramatic. South Dakota took him up on the suggestion.