News: Supreme Court Ruling on Taxes for Online Retailers
On June 1st, 2018, the U.S. Supreme Court ruled that state governments can collect taxes from online retailers, even if the retailer doesn't have a physical presence in the state. Until this decision, states could only collect taxes from online retailers that had in-state headquarters or another significant connection to that state.
This decision should benefit brick-and-mortar businesses, as sales taxes often increased prices, making it difficult to compete with prices offered by online retailers. The court's ruling also said that states should benefit from the decision by gaining access to a new source of tax revenue, estimated to be $33 billion annually across all states and online businesses.
Although critics of the ruling believe that consumers will face higher prices when shopping online, others think that increased competition between online and physical storefronts will cancel out any significant increases.
The ruling has already had a significant impact on the stock values of major online retailers. However, it's still unclear how small retailers that have an online presence will be affected, and whether states will alter their tax collection practices to account for the size of an online retailers.
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