The US Supreme Court has overturned a precedent in the eCommerce sales tax debate which means that all companies selling online in the US could now be required to collect and remit sales tax when sales exceed $100,000 or 200 separate transactions in each single state. Previously companies had to be physically present in a state to be required to collect and remit the tax. The case is now returning to the Supreme Court of South Dakota for a final decision. This could, say market commentators, level the playing field for bricks and mortar retailers whilst the individual states each stand to gain millions of dollars in sales tax.
eCommerce operators are understandably concerned with many citing the complex nature of the requirement to collect and remit sales taxes to multiple states, each of which operates differently, could cause smaller online businesses to fold and this includes third party sellers on marketplace sites. Whilst Amazon, for example, already collects sales tax in every state with levies, it doesn’t currently collect and remit sales tax on behalf of its third party sellers, except in a few states. It is estimated that US Amazon Marketplace national sales top $135bn a year. The final ruling could see many small online retailers abandoning their own eCommerce sites to sell via marketplaces that will manage the tax collections and remittances for them.
Share