One of the big advantages online retailers have had over your local shop is a lack of sales tax. Despite federal efforts to enforce this, and individual states making it happen, the rule was clear: If a company didn’t have a “physical presence” in your state, it didn’t have to collect state sales tax from you. All that has changed.
The case, which we first told you about in April, was over a South Dakota law which requires retailers, regardless of where they are, to collect and pay sales tax. This went against a 1967 Supreme Court ruling, but to be fair, that ruling was based on mail-order retailers, and the basis of the court’s ruling was essentially “Look, it’s not like people are buying everything through the mail!” It saw the taxing of buying books and joy buzzers through the mail as such a small segment of the population that it wasn’t worth spending a dollar to get a dime.
Now, with Amazon selling everything and Wal-Mart running Anita Ward choruses 24/7 about how they’ll ship their stuff to your door, things have changed a bit, and the Supreme Court has ruled accordingly — overturning fifty years of precedent.
In truth, this doesn’t have much impact on Amazon, which has been collecting sales tax across the country since last year. Most other major online retailers have followed suit, simply because it’s become cheaper for them to collect the tax and most of them have a “physical presence” in much of the country anyway, as fulfillment centers are popping up everywhere. Meanwhile, small brick and mortars in your state have a chance to be more competitive now, price-wise. The share of overall retail purchases online has been steadily rising almost a percentage point every year since 2010 — maybe this shift will actually help the “buy local” movement balance out the online boom.
(via NBC News
