Published: Fri, June 22, 2018
Finance | By Jaime Brady

Supreme Court ruling could have huge impact on Texas economy

Supreme Court ruling could have huge impact on Texas economy

The Supreme Court, in a 5-4 decision penned by Associate Justice Anthony Kennedy, came down on the side of the states in the landmark case South Dakota v. Wayfair, granting them greater power to require out-of-state retailers to collect sales tax on sales to in-state residents.

For most large online retailers (including Amazon - the country's largest), the decision will have little impact, since they've been voluntarily paying state sales taxes for years.

Officials say that a U.S. Supreme Court ruling that retailers must collect sales tax from buyers in other states could mean more than $200 million a year to IL.

"The Indiana Chamber is very pleased to see today's Supreme Court decision to permit states to move forward with sales tax collection from online retailers", said Bill Waltz, vice president of taxation and public finance for the Indiana Chamber of Commerce.

For the full story, head on over to CNN Money.

North Dakota could collect $20 to $50 million from online retailers after Thursday's Supreme Court ruling. "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".

A "quarter century of experience has convinced me" the Supreme Court's earlier decision was no longer justified, he wrote, adding that it was "never too late" to arrive at a better position. Now that consumers make a growing share of their purchases online, states said that cost them billions annually in potential sales tax revenue.

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E-commerce sales in the fourth quarter of 2017 increased to $119 billion, up more than 3% from the previous quarter and almost 17% from a year earlier, according to U.S. Census Bureau data.

Washington, which doesn't tax personal income or capital gains, depends heavily on sales-tax revenues to help fund government services.

Richard Anklam, executive director of the New Mexico Tax Research Institute, described the ruling as "a favorable decision for the state, which has tried to achieve this result for quite some time".

"Remote sellers can avoid the regulatory burdens of tax collection and can offer de facto lower prices caused by the widespread failure of consumers to pay the tax on their own". For decades, these sales tax laws were only applicable on purchases that were made from retailers who had a physical presence within that state.

The new rules will complicate matters for sellers in Minnesota, but the state Department of Revenue said it would issue more guidance on the matter in 30 days. Representatives of the state argued that the rule needed to be reconsidered in the age of online shopping.

Amazon has always been the "poster child" for this problem/opportunity as they have been the dominant online-only retailer for some time.

Internet companies opposed to the South Dakota law appealed.

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