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New Supreme Court Ruling Could Affect Many Online Shoppers



Lisa Nason, Online Shopping

The Supreme Court changed the landscape of online shopping Thursday, freeing state governments to compel retailers beyond their borders to collect sales-tax revenue from consumers and giving a boost to brick-and-mortar stores. With the boom in Internet commerce increasing exponentially, the court’s 5-to-4 decision could have an impact on millions of Americans almost immediately. For years, avoiding sales tax was a prime perk of online shopping.

States were the big winners at the Supreme Court. They previously were able to require only companies with a physical presence in their states to collect taxes, costing them an estimated $8 billion to $33 billion in uncollected taxes per year.

The losers could be large online retailers that had dodged collecting the taxes – Overstock, Wayfair, and Newegg were parties to the suit. Also, it could be small companies that say they are ill-equipped to comply with the requirements of more than 10,000 taxing jurisdictions across the country.

Neil Saunders, managing director of the research firm GlobalData Retail, predicted that consumers could pay as much as $15.2 billion a year in additional taxes. “The challenge for smaller players will be significant, and the concern here is that complexity could stymie innovation and entrepreneurialism,” he said. Sites such as eBay and Etsy, which serve as a marketplace for individual merchants and small businesses, said that having to collect taxes across the country would put their sellers at a disadvantage.

Have a tax question? Contact Lisa Nason.

 

Tax Partner with more than 20 years of experience preparing tax returns businesses and individuals, including income tax, property tax, state and local tax, sales & use tax, etc. We also work on estate and trust returns as well as assisting with tax planning, tax audits, and bookkeeping. We also help clients with general business advice and consulting as needed.

Nason Accounting, LLC is a Greenville, SC based full service certified public accounting firm that helps businesses and individuals increase and preserve their financial net worth. We provide accurate and timely accounting information that is vital for any individual or business.

We service clients both locally in the Upstate and throughout the Southeast. Our team understands the importance of great customer service, eliminating cumbersome bookkeeping stress, and making your success a priority. With experience in every imaginable accounting service, Nason Accounting, LLC is prepared to help you and your business with all of your financial needs.

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