The high court on Thursday overturned a 1992 ruling that a retailer must have a physical presence in a state to collect tax from buyers in that state. He said the court ruling made reaching the vote count harder.
"This now gives Amazon [, which already collects sales tax, ] insurance against there not being a Jet.com-like start-up using the sales tax advantage against them", he said. The National Retail Federation, for one, heralded the decision as a "major victory" that levels the playing field between online and physical retailers, according to a press release emailed to Retail Dive.
Montana is one of five states without a general sales tax, and this ruling will only impact businesses that sell online with out-of-state customers.
Most of the top 20 online sellers already collect taxes in almost all states, either because they have added local showrooms or warehouses, or because of state laws.
"South Dakota's tax system includes several features that appear created to prevent discrimination against or undue burdens upon interstate commerce", Kennedy wrote. Some retail leaders like former Office Depot CEO Steve Odland said the decision could raise prices for consumers by increasing sales taxes.
The Supreme Court in 2015 unanimously upheld Colorado's law requiring those notices and reports. That may change as state laws are modified.
"We are talking about middle-market businesses that have a CFO and maybe no tax department and that rely on an accounting firm to be their tax department", RSM's Kirkell said.
In deciding the case, Justice Kennedy wrote the majority opinions and was joined by four other justices: Ginsberg, Alito, Gorsuch (filed a concurring opinion) and Thomas (also filed a concurring opinion). But he said there were insufficient reasons to overrule the precedents and that Congress should have been left to address the matter. Justices John Roberts, Stephen Breyer, Elena Kagan, and Sonia Sotomayor dissented in the ruling.
The chief executive of a medium-sized sporting goods company based in San Diego, who did not wish to be identified to avoid making his company a target for state tax collectors, said it was unreasonable to expect small and medium sized businesses to deal with thousands of jurisdictions.
Edwards and House Democrats want to renew half the 1 percent tax, a proposal previously backed by the Senate. More than 20 states define a seller's physical presence as including any affiliated website.
Grover Norquist, president of the anti-tax group Americans for Tax Reform, said in a statement, "Today the Supreme Court said yes - you can be taxed by politicians you do not elect and who act knowing you are powerless to object".
Information for this article was contributed by Greg Stohr, Alexa Green, Molly Schuetz and Spencer Soper of Bloomberg News and by Adam Liptak of The New York Times.