Supreme Court rules states can collect sales tax for online purchases nationwide

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Justice Anthony Kennedy wrote that the previous decisions were flawed.

The 5-4 ruling strikes down a decades-old decision that impacted online sales; clearing the path for local governments to charge sales tax on goods regardless of whether or not the business has a "physical" footprint within its boundaries.

Numerous largest online retailers, such as Amazon, already pay sales taxes because they have enough of a physical presence in most states through their network of warehouses and distribution facilities to qualify as taxable by states. This ruling could help clear away any legal objections to taxes like Chicago's Netflix tax.

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In a case involving MA online retailer Wayfair, the US Supreme Court Thursday opened the door for states to collect sales taxes on products their residents buy from Internet retailers in other states.

In the digital era, the costs of complying with different tax regimes "are largely unrelated to whether a company happens to have a physical presence in a state", Kennedy wrote.

They had resulted in some companies not collecting sales tax on every online purchase.

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Each state has a complex sales tax system, which was cited in the 1992 Quill case as a reason against requiring businesses to collect the dues in states where they had no physical presence. Sellers who use eBay and Etsy, which provide platforms for smaller sellers, also aren't required to collect sales tax nationwide. South Dakota's governor has said his state loses out on an estimated $50m a year in sales tax that doesn't get collected by out-of-state sellers. Amazon already taxes items from its own warehouses.

South Dakota was backed by President Donald Trump's administration in the case.

Three large retailers-Wayfair, Overstock and Newegg-do not, and South Dakota sued them for failing to collect taxes after the state's law went into effect.

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On June 4, the last day of the special second session, Louisiana legislators rushed through a bill that used the same wording as a South Dakota law that was the subject to the constitutional challenge in the high court.

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