Chamber, Governor Applaud Supremes' Online Sales Tax Ruling

Jeannie Matthews
June 24, 2018

In making the 5-4 decision, the court acknowledged but largely tossed out the internet companies' arguments. North Dakota, which declared that the Constitution prohibited states from requiring businesses collect sales taxes unless they have a substantial connection to the state they operate in.

The Illinois law takes effect on October 1, and it's built on legislation passed in South Dakota that is the focus of the recent Supreme Court decision. Kennedy also said the previous ruling effectively created tax shelters for retailers.

Nebraska already requires residents to pay online sales taxes via their income tax returns. However, this only applies to items from its own inventory, not those from third-party sellers. He continued to write "the rule produces an incentive to avoid physical presence in multiple states". Businesses that want to begin collecting the taxes right away, and send them to the state, can register with the department.

State officials - including in SC, with its 6 percent sales tax - have argued they were losing out on millions - if not, in some cases, billions - of dollars in revenue a year under the Supreme Court's previous 1992 decision.

"A lot about our world and economy has changed in the 26 years since our nation's highest court last ruled on this issue", said Gov. Eric Holcomb.

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"If I'm a remote seller before this decision the fact that Oklahoma has a statute doesn't mean I have to do anything, because Oklahoma statute, under the supremacy clause of course, does not trump the Supreme Court's determination", Crosby said. "We're taking a careful look at the ruling to better understand its implications for Indiana", Holcomb said.

Sen. Tom Briese of Albion said he'll introduce an internet sales tax bill next year to direct the additional revenue toward property tax relief. "For years, this situation has resulted in substantial loss of revenue to states, thus increasing the tax burden on those who do pay the taxes they owe".

Shane M. Finn directs HBK CPAs & Consultants State and Local Tax ("SALT") Practice.

Many believe brick-and-mortar stores will get a boost in traffic if shoppers see there is no clear financial advantage to shopping online.

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