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OnlineSalesTaxSupremeCourtRuling.pdf

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6/21/2018 High Court: Online shoppers can be forced to pay sales tax | The Seattle Times

https://www.seattletimes.com/business/apxhigh-court-online-shoppers-can-be-forced-to-pay-sales-tax/ 1/5

High Court: Online hopper can e forced to pa ale tax

Originall pu li hed June 21, 2018 at 7:24 am Updated June 21, 2018 at 8:27 am

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The upreme Court a tate can force online hopper to pa ale tax. The 5-4 ruling Thur da i a win for tate , who aid the were lo ing out on illion of dollar under upreme Court deci ion that impacted online ale -tax collection. (AP Photo/Je ica Gre ko, file)

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6/21/2018 High Court: Online shoppers can be forced to pay sales tax | The Seattle Times

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In addition to eing a win for tate , who aid the were lo ing out on illion of dollar annuall , the ruling i al o a win for large retailer , who argued the ph ical pre ence rule wa unfair.

J ICA GR KO The A ociated Pre

WA HINGTON (AP) — The upreme Court a tate can force online hopper to pa ale tax.

The 5-4 ruling Thur da i a win for tate , who aid the were lo ing out on illion of dollar annuall under two decade - old upreme Court deci ion that impacted online ale tax collection.

The high court ruled Thur da to overturn tho e deci ion . The had re ulted in ome companie not collecting ale tax on ever online purcha e. The ca e the court overturned aid that if a u ine wa hipping a product to a tate where it didn’t have a ph ical pre ence uch a a warehou e or office, the u ine didn’t have to collect the tate’ ale tax. Cu tomer were generall uppo ed to pa the tax to the tate them elve if the don’t get charged it, ut the va t majorit didn’t.

Ju tice Anthon Kenned wrote that the previou deci ion were flawed.

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6/21/2018 High Court: Online shoppers can be forced to pay sales tax | The Seattle Times

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“ ach ear the ph ical pre ence rule ecome further removed from economic realit and re ult in ignificant revenue lo e to the tate . The e critique under core that the ph ical pre ence rule, oth a fir t formulated and a applied toda , i an incorrect interpretation of the Commerce Clau e,” he wrote.

In addition to eing a win for tate , the ruling i al o a win for large retailer , who argued the ph ical pre ence rule wa unfair. Retailer including Apple, Mac ’ , Target and Walmart, which have rick-and-mortar tore nationwide, generall collect ale tax from their cu tomer who u online. That’ ecau e the t picall have a ph ical tore in whatever tate the purcha e i eing hipped to. Amazon.com, with it network of warehou e , al o collect ale tax in ever tate that charge it, though third part eller who u e the ite to ell good don’t have to.

ut eller that onl have a ph ical pre ence in a ingle tate or a few tate could avoid charging cu tomer ale tax when the ’re hipping to addre e out ide tho e tate . Online eller that don’t charge ale tax on good hipped to ever tate range from jewelr we ite lue Nile to pet product ite Chew .com to clothing retailer L.L. ean. eller who u e e a and t , which provide platform for maller eller , al o aren’t required to collect ale tax nationwide.

The ca e the court ruled in ha to do with a law pa ed outh Dakota in 2016. outh Dakota’ governor ha aid hi tate lo e out on an e timated $50 million a ear in ale tax that doe n’t get collected out-of- tate eller . Lawmaker in the tate, which ha no income tax, pa ed a law de igned to directl challenge the upreme Court’ 1992 deci ion. The law required out-of- tate eller who do more than $100,000 of u ine in the tate or more than 200 tran action annuall with tate re ident to collect ale tax and turn it over to the tate.

outh Dakota wanted out-of- tate retailer to egin collecting the tax and ued everal of them: Over tock.com, electronic retailer Newegg and home good compan Wa fair. The tate conceded in court, however, that it could onl win per uading the upreme Court to do awa with it ph ical pre ence rule.

The Trump admini tration had urged the ju tice to ide with outh Dakota.

The ca e i outh Dakota v. Wa fair, 17-494.

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Follow Je ica Gre ko on Twitter at http://twitter.com/je icagre ko

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