A pending case before the Supreme Court has many consumers wondering: Am I going to start paying more in taxes to shop online? But you already do, to a certain extent. Amazon, Walmart, Target, Costco, Sears and others have already agreed to collect state sales taxes on online orders. After fighting tax collection efforts for years, Amazon is bowing to the necessity of having a physical presence in every state in the form of distribution centers if it wants to honor its delivery guarantees. That in turn means complying with each state’s sales tax laws.
However, Amazon only collects taxes on its third-party sellers for two states, Washington and Pennsylvania. And many other sellers that do not have a physical distribution network, such as Overstock.com, do not collect either. Such e-commerce businesses have not been required to collect sales taxes since the 1992 Supreme Court case, Quill v. North Dakota, which held that only those businesses with a physical operation in a state had to collect sales taxes from customers in that state. This issue is being revisited in the current Supreme Court case, South Dakota v. Wayfair, which the Court will decide sometime this summer.
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