09/21/2019

Supreme Court Rules States Can Require Online Merchants to Collect Sales Tax

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.

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