Internet sales tax ruling could have big impact in Florida

Cornelia Mascio
Giugno 24, 2018

Amazon, which was not involved in the Supreme Court case, collects sales taxes on direct purchases on its site but does not typically collect taxes for merchandise sold on its platform by third-party vendors, representing about half of total sales.

Today (June 21), the Supreme Court overturned a tax-related 1992 ruling giving states and local governments the ability now to collect possibly billions in internet sales tax from customers.

A previous 1992 ruling by the court had only allowed states to collect sales tax from online retailers who had a store or warehouse in the state.

Nebraska Retail Federation President Jim Otto applauded the ruling as a move that levels the playing field between brick-and-mortar stores, which collect sales taxes, and online retailers, which often don't.

"(The prior decision) puts both local businesses and many interstate businesses with physical presence at a competitive disadvantage relative to remote sellers", Justice Anthony Kennedy wrote for the majority.

Most sales taxes are called "sales and use tax", because consumers generally have a legal obligation to report and pay use tax when sales tax isn't collected on a sale. He argued, "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".

Small online businesses may be exempt, but just where the line will be drawn is unclear.

"It will further level the playing field between in-state brick-and-mortar retailers and their online competitors, while also boosting Indiana's sales tax base". They argue tax-collection software makes it easier for retailers big and small to comply with their tax obligations, which vary widely from state to state, and product to product.

"The taxpayers of Florida really rely heavily on the sales tax".

The exact impact of the ruling on Florida's sales tax collections is unknown but it could be significant.

The decision could generate "hundreds of millions of dollars" in new revenue for NY state, according to Joseph Bishop-Henchman, vice president of the Tax Foundation think tank. It's particularly expected to help states with no income tax, like Florida, Wyoming, and Washington, since those states rely more heavily on sales taxes.

"Right now, most of our sales are in Florida so I don't think we'll meet the threshold". Billions in sales every year will now be taxed, which had been left untouched for over a generation. But the court decision does not require states, counties and cities to establish such thresholds in order to force retailers to collect sales taxes on their behalf.

A group working to repeal recent tax hikes will decide in the next few days whether to file a new referendum petition after the Oklahoma Supreme Court ruled Friday that the one being circulated was misleading and fatally flawed. Now, rivals will be charging sales tax where they hadn't before.

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