Online shoppers could find costs going up after the Supreme Court did away Thursday with a decades-old precedent limiting the ability of states to collect sales tax on certain out-of-state Internet purchases.
The high court has said for more than 50 years in various rulings that states can not collect taxes from sellers without a "physical presence" in those states.
Kevin Lyons, spokesman for Texas Comptroller Glenn Hegar, said, "We welcome the court's ruling in this case and are now assessing any potential revenue impacts as a result of this decision as well as whether any rule changes or legislation might be required to achieve the benefits of the decision".
"In light of internet retailers' pervasive and continuous virtual presence in the states where their websites are accessible, the states have ample authority to require those retailers to collect state sales taxes owed by their customers", U.S. Solicitor General Noel Francisco said in a friend-of-the-court brief. The cases the court overturned said that if a business was shipping a customer's purchase to a state where the business didn't have a physical presence such as a warehouse or office, the business didn't have to collect the state's sales tax.
The decision is a big win for major corporations such as Apple and Walmart, who generally pay sales tax due to their "physical presence" in most states throughout the country. It also impacts Amazon, but only for the goods it sells from third-party merchants.
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South Dakota was backed by President Donald Trump's administration in the case. Chief Justice John Roberts dissented along with Stephen Breyer, Sonia Sotomayor, and Elena Kagan.
Chicago was one of the first areas to impose a so-called Netflix tax but other states and towns have started to tax streaming and video services. Amazon stock is down over 1.2%.
The current regulation "allows remote sellers to escape an obligation to remit a lawful state tax is unfair and unjust", added Kennedy.
South Dakota specifically brought this lawsuit against Wayfair, Overstock.com, and Newegg.