States want high court to help them col­lect on­line sales tax


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, gen­er­ally col­lect sales tax from cus­tomers who buy from them on­line. But other on­line sell­ers, from 1-800 Con­tacts to home goods site Way­fair, can of­ten 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 they’re 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, which rep­re­sents more than 70 large re­tail­ers.

For years, the is­sue of whether outof-state sell­ers should col­lect sales tax had to do mostly with one com­pany: Ama­ The on­line gi­ant is said to ac­count for more than 40 per­cent of U.S. on­line re­tail sales. But as Ama­zon has grown, dot­ting the coun­try with ware­houses, it has had to charge sales tax in more and more places.

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