Supreme Court: States Can Force Online Retailers to Collect Sales Tax

You have most likely been able to avoid paying sales tax on a lot of online purchases over the years, but that’s coming to an end. In a 5-4 decision, the US Supreme Court has overturned decades-old rules that limited which transactions could be charged state sales taxes. This will be a huge boost to state budgets, but online retailers won’t be pleased.

Sales tax collection previously followed that is commonly known as the physical presence rule. If a business had a physical presence in a state, then they could be forced to collect sales tax at the time of purchase. Writing for the majority, Justice Anthony Kennedy wrote that the old rule is increasingly “removed from economic reality and results in significant revenue losses to the States.”

The suit (South Dakota v. Wayfair) was brought by 40 states that claim the old rule had cost them billions in lost tax revenue. While retailers were not required to collect sales tax, that tax was technically still owed. It was your responsibility to pay sales tax on your untaxed online purchases at the end of the year, but virtually no one did that. States had no viable way to track down everyone who wasn’t paying their sales tax, which is why they wanted to force retailers to collect it regardless of where they were located.

Brick-and-mortar retailers are also celebrating the news. Physical stores have always had to charge sales tax, but many online retailers have been able to undercut them by ignoring sales tax. For example, the popular electronics seller B&H only charges sales tax in New York and New Jersey, where it has a physical presence. Meanwhile, Amazon’s expansive operations meant it was already charging sales tax almost everywhere. This ruling could give it a boost as competing online stores are forced to raise prices at checkout.

Nothing will change immediately after this ruling. States can, however, begin passing laws that require online retailers to collect sales tax from customers even if they have no physical presence in a state. 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. The law that sparked this challenge passed in South Dakota in 2016. It required out of state retailers with more than $100,000 in SD sales to collect sales tax.

The court’s conservative wing argued that the previous ruling was sufficient to protect the rights of states, but the Trump administration urged the court to side with South Dakota and expand tax collection powers.

Continue reading

NASA Created a Collection of Spooky Space Sounds for Halloween

NASA's latest data release turns signals from beyond Earth into spooky sounds that are sure to send a chill up your spine.

How Apple Is Collecting Your Data in macOS Big Sur

Apple's new Big Sur has been accused of some serious privacy violations and unfriendly user-access controls. The situation is a bit more nuanced.

Asteroid Mission Successfully Collected Samples, Japan Confirms

Japan's Hayabusa2 mission wrapped up last week when the sample container parachuted down in Australia. The mission certainly looked like a success at every step along the way, but the true test is whether or not it collected the sample it flew out there to get.

NASA Puts Its Space Rock Collection Online

Getting these precious samples ready for their online debut wasn't as simple as snapping a few photos and slapping some HTML together.