Supreme Court to rule on collecting sales tax online

WASHINGTON — Sales Tax: $0. Online shoppers have gotten used to seeing that line on checkout screens before they click “purchase.” But a case before the Supreme Court could change that.

At issue is a rule stemming from two decades-old Supreme Court cases: If a business is shipping to a state where it doesn’t have an office, warehouse or other physical presence, it doesn’t have to collect the state’s sales tax.

That means large retailers such as Apple, Macy’s, Target and Walmart, which have brick-and-mortar stores nationwide, collect sales tax from customers who buy from them online. But other online sellers, from 1-800 Contacts to home goods site Wayfair, can sidestep charging the tax.

More than 40 states are asking the Supreme Court to reconsider that rule in a case being argued Tuesday. They say that they are losing out on “billions of dollars in tax revenue each year, requiring cuts to critical government programs,” and that their losses compound as online shopping grows. But small businesses that sell online say the complexity and expense of collecting taxes nationwide could drive them out of business.

Large retailers want all businesses to “be playing by the same set of rules,” said Deborah White, the president of the litigation arm of the Retail Industry Leaders Association.

The case now before the Supreme Court could affect third-party Amazon sellers and many other sellers that don’t collect taxes in all states.