Internet Taxation

06/21/2018

Beltway Breakfast – Supreme Court Says States Can Now Collect Sales Tax From All Online Retailers

Beltway Breakfast – Supreme Court Says States Can Now Collect Sales Tax From All Online Retailers

While the president suggested that the ruling would help small businesses, Steve DelBianco, president and CEO of the free-market advocacy group NetChoice, explained that Thursday’s court ruling would actually hurt the small business of which Trump has styled himself a champion.

“While a fraction of online commerce was free of sales tax before this ruling, the Supreme Court has now created an even greater imbalance by placing far greater burdens on Internet shopping compared to its “offline” counterparts,” said DelBianco, whose group has long opposed allowing states to require online retailers to pay sales tax absent a physical presence in a given state.

DelBianco explained that now that Supreme Court has “legislated from the bench,” small online merchants have their “already razor-thin profit margins” cut even further, while brick-and-mortar remain unaffected.

“When these businesses disappear, consumers will be the biggest losers,” he said.

Former Congressman Chris Cox, the group’s outside counsel and author of the Internet Tax Freedom Act, said the court’s decision will do the most harm to small online retailers and those with a single location, “because they can’t afford the overhead to comply with thousands of different tax rules across the country.”

Cox predicted that many small online retailers would be forced to close their doors or be bought out by online retail giants.

“The last hope for consumers and small online business owners is for Congress to take action. It should be Congress, not the courts, that sets the rules for interstate sales tax collection,” he added.

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