USA - Supreme Court Decision

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Further to a previous bulletin we can bring you news that June 21st 2018 saw the U.S. Supreme Court make their ruling in the landmark South Dakota v. Wayfair case. The Court voted 5-4 in favour of South Dakota and thus that states can require online sellers to collect sales taxes.

This reverses a 1992 ruling on Quill Corp. v. North Dakota that said sellers only had to collect state sales taxes if they had a warehouse or office in the state. Modern e-commerce “does not align” with the physical presence required in the 1992 decision, one of the judges wrote.

According to a report from the Government Accountability Office earlier in the year state and local governments could have collected up to $13 billion more in 2017 if they’d been allowed to require sales tax payments from online merchants and other remote sellers, so we now look to state governments to see how they react. It is interesting to note that in recent weeks, ahead of the decision, Connecticut, Hawaii, Illinois and Louisiana have introduced plans for economic nexus on remote sellers from out of state whose turnover or volume sold breaches specified thresholds. We will of course keep you posted with developments.



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