NICK EICHER, HOST: It’s Friday, the 22nd of June, 2018.
Glad to have you along for today’s episode of The World and Everything in It. Good morning, I’m Nick Eicher.
MARY REICHARD, HOST: And I’m Mary Reichard. Yesterday, the Supreme Court overturned 50 years of precedent.
Online retailers can now be required to collect sales and use taxes—even in states where they lack a brick and mortar store. Prior rulings required a retailer to have a physical presence within a state before imposing such taxes. A slim five justice majority noted how the internet marketplace has changed the dynamics of the national economy.
You can hear that sentiment in this clip from Justice Anthony Kennedy during arguments in April:
KENNEDY: … this court has made a statement of constitutional law that … has now, especially in light of the cyber age, proven incorrect.
In 2016, South Dakota passed a law requiring online vendors to charge its residents a sales tax when they buy online. This applied only to sellers with at least 200 transactions in the state, or over $100,000 in sales. South Dakota then sued a few big online stores for noncompliance. Wayfair and Overstock.com were two of them.
States seeking more tax money cheer the ruling. So does the Trump administration that argued the old law put physical stores at a price disadvantage compared to online stores.
Smaller online vendors say the ruling will put them out of business and consumer groups decry added costs.
We’ll have more on this and other rulings on Monday’s Legal Docket.