Supreme Court adopts new rules for cellphone tracking

Supreme Court adopts new rules for cellphone tracking

In a close decision, the Supreme Court on Thursday determined that states can force internet retailers to collect sales taxes from shoppers even in states where they have no physical presence, handing traditional retailers and state governments a major victory.

In the amicus brief eBay filed in support of the retailers South Dakota had sued over collecting sales taxes - Wayfair, Overstock and Newegg - the company said overturning Quill would "greatly undermine the growth opportunities available to the hundreds of thousands (if not millions) of independent small businesses that sell online and represent a vital segment of the national economy".

Many e-commerce giants like Amazon and Walmart already collect sales tax because they're so big they have a large enough presence throughout various states to collect sales tax.

The court chose to overturn a 1992 decision that a physical presence was necessary to require retailers to collect and send sales taxes to a state.

"For years, online-only retailers have exploited this loophole that allows them not to collect sales tax, which has given them an unfair competitive advantage over brick-and-mortar stores", said James Miller, a spokesman for the Florida Retail Federation.

For the full story, head on over to CNN Money. "If there is a seven or nearly eight percent difference in price in a product at "XYZ" store, or "ABC" online, that does make a difference". Meanwhile, Amazon's expansive operations meant it was already charging sales tax nearly everywhere.

The Supreme Court of the US (SCOTUS) has just overruled 1992's Quill Corp v. This will add a new layer of complexity for small businesses that were previously selling without sales tax, but the specific rules will vary by state.

Under the ruling Thursday, states can pass laws requiring out-of-state sellers to collect the state's sales tax from customers and send it to the state. But most of Amazon's purchases are from millions of independent merchants who post inventory on the web store, and many of those sales now aren't taxed.

First, the court did not rule out the possibility that states may not collect taxes on all online purchases, given the negligible size of some transactions. "For centuries, states have threatened the free flow of interstate commerce by attempting to tax and regulate businesses all across the country, regardless of location". Newly-public sales tax automation company Avalara saw its shares spike 30 percent immediately following the ruling.

In testimony before the Legislature's House Ways and Means Committee in 2017, analysts gave a rough estimate of $200 million in potential annual new sales tax revenue from applying the sales tax to more remote sales.

For Amazon, the loyalty of its Amazon Prime subscribers, who pay monthly or yearly fees for shipping discounts, could soften the blow of tax collection, said Charlie O'Shea, a retail analyst at Moody's.

Amazon, Shopify (SHOP), Etsy (ETSY) and Wayfair and other e-commerce stocks all were down.

More than 40 states had submitted testimony in favor of upholding the South Dakota law.

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