If you’re in the digital commerce industry or if you’re an online consumer, you’ve been following this. If you’re an online retailer, you’ve been following this very closely. I’m talking about the recent Supreme Court decision that gives states the OK to require that sales tax be collected from online retailers. What does this ruling essentially mean? Time will tell the overall impact it has on a consumer’s online buying experience, but one thing is absolutely certain: online shopping just got more expensive.
In a 5-4 decision, the Justices went against more than 50 years of rulings that actually prevented states from requiring that their residents pay sales tax on any out-of-state purchases. So where did all this renewed high-level interest come from? Many believe it came from the top—literally—when President Trump very publicly (and somewhat inaccurately) tweeted his distaste for online retail Goliath, Amazon paying “little or no taxes to state & local governments.” Inaccurate because Amazon has actually imposed sales tax on 45 states since way back in April of 2017.
Flashback to 1967 when the Supreme Court first got involved. It was the dawn of mail order catalog purchases, but they were few and further between when compared to the volume of sales that brick and mortars were seeing. The rational was that since sales paled in comparison, it would prove a hardship for catalog companies to have to worry about figuring out all the different states’ unique sales tax codes.
And oh, how the times have changed.