Select Page
SCOTUS: States Can Charge Ecommerce Sales Tax… But There’s More To The Story.

SCOTUS: States Can Charge Ecommerce Sales Tax… But There’s More To The Story.

States Can Force Ecommerce Sales Tax

 

States Can Charge Ecommerce Sales Tax

So, it finally happened. The South Dakota state government can now charge eCommerce sales tax for online businesses.

This morning the US Supreme Court announced the 5-4 ruling, overturning a 1992 decision (Quill Corp v. North Dakota) that barred states from collecting sales tax from businesses with “no physical presence” in their state. The high court ruled against Wayfair, Overstock.com, and Newegg, sending their stock price into a fall (along with that of Amazon, Etsy, Ebay and more). As a result of the ruling, many fear the gates have been opened for all 45 states that collect sales tax to use the Wayfair decision to charge Internet sales tax. When this happens, online shops will likely begin charging customers at the checkout, driving up eCommerce prices for customers.

However… Consumers are already required to report their online purchases and pay the applicable taxes. According to CNN, “Last year, states could have collected as much as $13.4 billion in additional online sales taxes, according to the General Accountability Office. Although buyers are technically supposed to add up their purchases and pay all the applicable taxes along with their regular filing, few do.” As a result, some argue this decision is fair, especially when one considers eCommerce’s massive impact on the U.S. economy.

In the majority opinion, Justice Anthony Kennedy wrote, “The Internet’s prevalence and power have changed the dynamics of the national economy.” He also mentioned the need for states to collect the tax as digital retail continues to explode, saying, “The expansion of e-commerce has also increased the revenue shortfall faced by States seeking to collect their sales and use taxes.” With eCommerce poised to make up 17% of US retail sales by 2022, the ruling makes sense now more than ever.

Who Wins?

The likely winners in this scenario will be states who can now collect the online sales tax (many more to come), and Amazon, who has been paying state sales taxes for years. While the decision will hurt smaller, non-monolithic eCommerce businesses, Amazon’s competition will now likely face the same tax requirements, keeping Amazon even still again, ahead of the curve.

For now, in South Dakota, the law will only apply to eCommerce sites with more than $100,000.00 in sales revenue from commerce within the state. The state now stands to gain an additional 50 million dollars in revenue annually from the tax. Lastly, as CNBC reports, “[the] states that are likely to see the biggest percentage increase in revenue are Louisiana, Tennessee, South Dakota, Oklahoma and Alabama, according to the Barclays research.”

Want to learn more about the future of eCommerce? Check out our latest podcast here.

Entrepreneur Podcast Network Interviews Redstage CEO on Transformative B2B eCommerce

Entrepreneur Podcast Network Interviews Redstage CEO on Transformative B2B eCommerce

Entrepreneur Podcast Network Interviews Redstage CEO on Transformative B2B eCommerce

What is Transformative B2B eCommerce?

This week, Eric Dye of the Entrepreneur Podcast Network interviewed Redstage CEO Adam Morris on the coming B2B eCommerce revolution. In this episode, the pair discuss the latest trends, market news, and strategies for companies who “NEED” to adapt to the new standards of digital commerce. Click play above to listen now or follow the link at the bottom to download the podcast. Happy listening!

Insights included in this entrepreneur interview:

1. “What does the B2B eCommerce market look like and why is B2B super hot right now?”

2. “How is B2B eCommerce different from traditional online retail?”

3. “What are the main roadblocks for companies going digital?”

4. “I’ve seen a lot about Redstage and Transformative B2B eCommerce, what is that exactly?”

5. “For companies thinking about going digital, how does Redstage’s process help companies achieve positive digital transformation?”

Download the full podcast here.

Don’t forget to check out the ePodcast Network for more entrepreneur insights!

About Adam Morris


Entrepreneur Podcast Network Interviews Redstage CEO on Transformative B2B eCommerceAs a digital entrepreneur, Adam Morris has been working alongside Anthony Latona (Redstage’s CMO) since their university days. The duo co-founded several businesses together over the years, most recently Redstage, which started in 2008. As Morris recalls, “All of our businesses revolved around online commerce, and we’ve had a knack for being ahead of the Internet business curve. Redstage is an eCommerce agency that specializes in web design, development, strategy and support for B2B and B2C clients all over the world. As part of the Fulcrum Family of companies, we have over 700 employees on 5 continents. For the past 10 years we’ve been transforming companies through eCommerce, now focusing primarily on Magento and Shopify. With B2B eCommerce set to explode before the end of the decade, we’re ready to take on the biggest challenges facing the world’s largest companies – especially when it comes to tackling the transition to digital, something we’re quite good at.”

If you enjoyed this podcast, check out this post on MagePlaza about our developers’ biggest “B2B Pet Peeves” (the top 4 signs that a B2B site needs to upgrade).