Across the retail industry, some disagreement has followed a U.S. Supreme Court ruling upholding a 2016 South Dakota law that requires online merchants to collect state sales tax if, annually, they do more than $100,000 in sales or complete 200 transactions with state residents.
The decision has opened the way for all states to collect sales tax from e-tailers. According to a previous ruling, an e-tailer had to have a physical presence with its border for a state to collect sales tax. The split decision by the court in the case “South Dakota v. Wayfair,” reversed the earlier precedent, although, dissenting opinions written by court members included the argument that the U.S. Congress rather than the court should settle the tax issue.
Named in the suit, Wayfair issued a statement in the aftermath of the Supreme Court decision. The statement read, in part: “We welcome the additional clarity provided by the court’s decision today. Wayfair already collects and remits sales tax on approximately 80% of our orders in the U.S., a number that continues to grow as we expand our logistics footprint. As a result, we do not expect today’s decision to have any noticeable impact on our business, as it may on other retailers who do not currently collect and remit sales tax.
“Wayfair has long supported a legislative solution that would establish a level playing field for brick-and-mortar and online retailers by permitting states to collect sales tax on online sales. While we believe the court was not the ideal venue for creating this level playing field, we expect that today’s decision will bring clarity and certainty to this issue.”
Overstock.com was more adamant in calling attention to potential consequences of the Supreme Court decision, while saying it was prepared to comply.