Sci-tech

Sales tax bill voted down by Louisiana House

Sales tax bill voted down by Louisiana House”

The North Dakota Legislature a year ago passed a law requiring the collection of sales tax from online retailers, effective whenever the U.S. Supreme Court acted to overturn the Quill decision or made a similar ruling, according to Attorney General Wayne Stenehjem, who joined with South Dakota in pushing to overturn the Supreme Court's 1992 decision.

"Each year, the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the States", Kennedy wrote.

"Ultimately, this is an issue of fairness".

Likewise, advocates for the state's mom-and-pop stores - which primarily make sales in brick-and-mortar outlets, not online - say that two-decade-old decision harmed small business owners. Chief Justice John Roberts dissented, saying the decision should be left to Congress, and was joined by Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan.

But most of Amazon's purchases are from millions of independent merchants who post inventory on the webstore, and many of those sales now are not taxed, and 3rd-party merchants account for about 50% of Amazon's total online sales.

Stocks for several major online retailers dropped in response to the news, including Amazon, Wayfair, and eBay.

As CBS2's Hazel Sanchez reported, many states, like New Jersey, now do not require any online stores to collect sales tax if they do not have an office or physical store in the state. Other states would have to revise their tax laws. The attorney general of South Dakota, who defended a state rule that required out-of-state retailers to collect state taxes, said the decision is a win for the state and small businesses. It also impacts Amazon, but only for the goods it sells from third-party merchants. "Any adjustment to those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress", Roberts wrote.

In total, 38 states have considered and 15 enacted, measures aimed at collecting remote sales taxes since 2016. "Now Congress must respond by passing federal legislation to create a universal federal framework for sales and use tax collection in a way that benefits businesses regardless of the state where their business resides and avoids a patchwork of state-by-state laws".

Sales taxes have suffered base erosion, as I discussed above.

Kosewicz says for her, sales may not reach the threshold in each state. And many other sellers that do not have a physical distribution network in a particular state, such as Overstock.com, do not collect either.

President Trump has declared the Supreme Court ruling as a "big victory for fairness" in the U.S. and a "great victory for consumers and retailers". Although technically consumers are required to pay sales tax on all purchases, it is practically impossible to collect without the retailer applying it at the point of sale.

The case is South Dakota v. Wayfair, 17-494.



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