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state sales tax

US Supreme Court Decision: Just Making Sales within a State Can Require Sales Tax Collection

For years, eCommerce sellers and online retailers quoted the 1992 US Supreme Court ruling in the Quill case, (Quill Corp. v. North Dakota (91-0194), 504 U.S. 298 (1992)) to justify why they did not have to collect sales tax. The ruling basically said that a state could not require sellers to collect sales tax unless they had a physical presence in that state.

 

Some sellers were correct in their application of this ruling, while others likely misunderstood what constituted a physical presence. It no longer matters though, because on Thursday, June 21, 2018, the US Supreme Court issued a ruling in the case of South Dakota v. Wayfair, overturning Quill v. North Dakota, as well as National Bellas Hess v. Department of Revenue, which established the physical presence requirement in the first place.

 

This means that a state can require you to collect sales tax simply for selling to a customer located in that state.

 

What are your thoughts? Is this a state-run tax grab or fair commerce practice?

 

For more detailed information: Supreme Court rules that states can require online retailers to collect sales taxes

Dave Thoma

Former Amazon exec with 25 years of eCommerce & digital marketing experience. I enjoy having fun while helping others to succeed. I'm a 3-time "cancer" survivor, frustrated golfer and coffee nut (not necessarily in that order).

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