Online, be ready to pay sales taxes

States can demand that some websites charge shoppers

Shoppers heading online to purchase holiday gifts will find they’re being charged sales tax at some websites where they weren’t before. The reason: the Supreme Court.

A June ruling gave states the go-ahead to require more companies to collect sales tax on online purchases. Now, more than two dozen have moved to take advantage of the ruling.

“Will your shopping bill look any different? ... The answer right now is it depends,” said Jason Brewer, a spokesman for the Retail Industry Leaders Association.

Whether shoppers get charged sales tax on their online purchases comes down to where they live and where they’re shopping.

Before the Supreme Court’s recent decision , the rule was businesses selling online had to collect sales tax only in states where they had stores, warehouses or another physical presence. That meant that major retailers such as Apple, Best Buy, Macy’s and Target, which have brick-and-mortar stores nationwide, were generally collecting sales tax from online customers. But that wasn’t the case for businesses with a big online presence but few physical locations.

Now, states can force outof-state sellers to collect sales tax if they’re doing a fair amount of business in the state. That means retailers such as Overstock. com, home goods company Wayfair and electronics retailer Newegg can be required to collect tax in more states. Those companies were involved in the case before the Supreme Court, but a range of businesses from jewelry website Blue Nile to clothing and outdoor company L.L. Bean and electronics retailer B&H Photo-video are also affected.

States had a strong interest in taking advantage of the Supreme Court’s decision by passing laws or publishing regulations prior to this holiday shopping season if at all possible, said Richard Cram of the Multistate Tax Commission, which works with states on tax issues. Those that did have generally been following the lead of South Dakota, which brought the issue to the Supreme Court. South Dakota requires sellers who don’t have a physical presence in the state to collect sales tax on online purchases if they do more than $100,000 in business in South Dakota or more than 200 transactions annually with state residents.

Alabama, Illinois, Indiana, Kentucky, Maryland, Minnesota, Nevada, New Jersey, North Dakota, Washington and Wisconsin began enforcing their own requirements starting Oct. 1. But a number of big states, including New York, do not yet have similar collection requirements in place. As a result, consumers shopping online from those states and others that have yet to act may not be charged sales tax on some websites for a little longer.