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.
This story by Bill Mears appeared in Fox News.
The 5-4 ruling called the current rules “unsound and incorrect.”
Currently, businesses shipping a product to another state where it does not have a “physical presence” – a store, office or warehouse – are not forced to collect that state’s sales tax.
A coalition of small business owners, many offering their online goods from home offices, say their profits would evaporate if forced to comply with complex tax rules in all 50 states.
Yet a majority of the states say they are losing billions in revenue, and they are supported by many large, so-called brick-and-mortar retailers like Wal-Mart that do pay sales taxes, regardless of whether their sales are done in stores or online.
The high court ruled Thursday to overturn the prior decisions.
E-commerce now makes up about 10 percent of U.S. retail sales, according to the Commerce Department.
