Online retailers to be charged tax in US

In a landmark decision that will see online shopping become significantly more expensive, the US Supreme Court has ruled that states can impose tax on sales from retailers outside the state. According to a report in The Independent, the ruling paves way for US states to collect tax from online retailers like Amazon and Ebay, which have previously been protected from paying tax if they had ‘no physical presence’ in the states. The Supreme Court 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. The ruling, authored by Justice Anthony Kennedy, was likely to lead other states to try to collect sales tax on purchases from out-of-state online businesses more aggressively. ‘Rejecting the physical presence rule is necessary to ensure that artificial competitive advantages are not created by this court’s precedents,’ Kennedy said. While the decision will be seen as a victory for South Dakota and other states that benefit from increased tax revenues, online shoppers will likely see significantly increased prices while checking out online. The hardest hit, according to e-commerce lawyer Chris Cox, will be small online businesses, who depend on not paying state taxes to undercut traditional brick and mortar stores. ‘Consumers will quickly feel the negative effects as those businesses dry up or are forced into the arms of Internet giants,’ Cox said.

Full report in The Independent