United States

Supreme Court Agrees to Consider Internet Sales Taxes

A ruling that exempts out-of-state retailers from charging sales tax was made before the era of Amazon and online shopping

The Supreme Court said Friday it will decide whether states should be able to collect sales taxes for online purchases, a move that would raise costs for consumers while generating more money for local governments, NBC News reported.

Just over a quarter-century ago, the court ruled that a state could not force mail order catalog companies to collect sales taxes unless they had a physical presence in the state. Led by South Dakota, 36 states want the court to take another look at the issue, arguing that the 1992 decision was issued "before Amazon was even selling books out of Jeff Bezos's garage."

Internet companies "can instantly tailor their marketing and overnight delivery of hundreds of thousands of products to individual customers based on their IP addresses. These companies can surely calculate sales tax from a zip code," the state said.

The states also said the current ban on internet sales taxes puts brick-and-mortar retailers, who have to collect sales taxes, at a disadvantage.

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