High Court: Online shoppers can be forced to pay sales tax

Tax Law

The Supreme Court says states can force online shoppers to pay sales tax. The 5-4 ruling Thursday is a win for states, who said they were losing out on billions of dollars annually under two decades-old Supreme Court decisions that impacted online sales tax collection.

The high court ruled Thursday to overturn those decisions. They had resulted in some companies not collecting sales tax on every online purchase. The cases the court overturned said that if a business was shipping a product to a state where it didn't have a physical presence such as a warehouse or office, the business didn't have to collect the state's sales tax. Customers were generally supposed to pay the tax to the state themselves if they don't get charged it, but the vast majority didn't. Justice Anthony Kennedy wrote that the previous decisions were flawed.

"Each year the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the States. These critiques underscore that the physical presence rule, both as first formulated and as applied today, is an incorrect interpretation of the Commerce Clause," he wrote.

In addition to being a win for states, the ruling is also a win for large retailers, who argued the physical presence rule was unfair. Retailers including Apple, Macy's, Target and Walmart, which have brick-and-mortar stores nationwide, generally collect sales tax from their customers who buy online. That's because they typically have a physical store in whatever state the purchase is being shipped to. Amazon.com, with its network of warehouses, also collects sales tax in every state that charges it, though third party sellers who use the site to sell goods don't have to.

But sellers that only have a physical presence in a single state or a few states could avoid charging customers sales tax when they're shipping to addresses outside those states. Online sellers that don't charge sales tax on goods shipped to every state range from jewelry website Blue Nile to pet products site Chewy.com to clothing retailer L.L. Bean. Sellers who use eBay and Etsy, which provide platforms for smaller sellers, also aren't required to collect sales tax nationwide.

Related listings

  • Ohio's top court to hear arguments on promotions tax dispute

    Ohio's top court to hear arguments on promotions tax dispute

    Tax Law 06/16/2018

    The Ohio Supreme Court plans to hear arguments in a dispute over promotions including bobbleheads and other items offered by the Cincinnati Reds to ticket buyers.At issue is whether the Reds are exempt from paying tax on the purchase of the promotion...

  • Taxpayer tab for law firm overseeing Atlantic City hits $4.8M

    Taxpayer tab for law firm overseeing Atlantic City hits $4.8M

    Tax Law 04/21/2018

    New Jersey taxpayers' tab for the takeover of Atlantic City has reached about $5 million in fees from the law firm former Gov. Chris Christie picked to oversee the gambling resort.Records obtained Thursday by The Associated Press show the firm of Chi...

  •  Idaho Supreme Court upholds grocery tax veto

    Idaho Supreme Court upholds grocery tax veto

    Tax Law 08/07/2017

    The Idaho Supreme Court on Tuesday upheld Gov. C.L. "Butch" Otter's contentious veto of legislation repealing the state's 6 percent sales tax on groceries.The high court's decision comes after 30 state lawmakers filed a lawsuit claiming Otter took to...

Grounds for Divorce in Ohio - Sylkatis Law, LLC

A divorce in Ohio is filed when there is typically “fault” by one of the parties and party not at “fault” seeks to end the marriage. A court in Ohio may grant a divorce for the following reasons:
• Willful absence of the adverse party for one year
• Adultery
• Extreme cruelty
• Fraudulent contract
• Any gross neglect of duty
• Habitual drunkenness
• Imprisonment in a correctional institution at the time of filing the complaint
• Procurement of a divorce outside this state by the other party

Additionally, there are two “no-fault” basis for which a court may grant a divorce:
• When the parties have, without interruption for one year, lived separate and apart without cohabitation
• Incompatibility, unless denied by either party

However, whether or not the the court grants the divorce for “fault” or not, in Ohio the party not at “fault” will not get a bigger slice of the marital property.