Attention online shoppers! Hold on to your wallets! The Supreme Court has just given state legislatures the green light to add to your sales tax burden. Yes, that’s right. You may now be paying more at your online retailer because now they have the ability to add sales tax to your purchases. Ugh!
States have the authority to make online retailers collect sales taxes, the Supreme Court ruled Thursday, opening a new chapter in economic history where e-commerce is treated as a mature player in a marketplace that is no longer defined by trips to the corner store or the shopping mall.
By a 5-to-4 vote, the court closed a loophole that helped fuel the early growth of internet sales, overruling its own 1992 precedent that forbid states from requiring merchants to collect sales tax unless those sellers maintained a “physical presence” within the state’s borders.
Justice Anthony Kennedy, who suggested years ago that the pre-Amazon.com precedent should be updated for the digital age, wrote for a majority that defied conventional ideological lines. Liberal Justice Ruth Bader Ginsburg joined his opinion, along with conservative Justices Clarence Thomas, Samuel Alito and Neil Gorsuch.
Here’s the bottom line. Good for state coffers, bad for shoppers.
The ruling likely will spell the end of an era in which consumers could save on taxes by purchasing goods online instead of from local merchants.
The ruling is a victory for states that argued tax-free internet sales were costing them billions of dollars in revenue. It is also a big win for brick-and-mortar stores, which have to compete against online rivals that don’t have to collect the taxes on internet purchases.
This is really gonna cramp my shopping style. And I’m not crazy about the added tax extortion either. This is definitely a blow to those of us who advocate for smaller government and their ability to acquire/spend our money.