Supreme Court sales tax ruling to make online shopping more expensive

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The high court on Thursday overturned a 1992 ruling that a retailer must have a physical presence in a state to collect tax from buyers in that state.

The National Retail Federation (NRF) hailed today's Supreme Court ruling on sales tax in South Dakota v. Wayfair. Attorney General Marty Jackley said it was a win for South Dakota and for "Main Street businesses across America that will now have a level playing field and tax fairness". Officials in New Hampshire, which doesn't have a sales tax, say the decision could force its businesses to collect taxes for other states.

The next time you buy something online, expect to pay more. South Dakota has estimated it loses up to $50 million a year in sales tax on online purchases; a 2017 report from the federal government found that USA states collectively miss out on as much as $13 billion in unpaid tax on internet sales, according to Reuters.

"States struggling with rising health care and pension costs will welcome the additional tax revenue, which in effect represents revenue otherwise lost from brick-and-mortar stores", S&P added. The company maintains that it has been collecting tax in all 45 states which require it.

That's because lawmakers in Olympia have already moved to expand online sales-tax collections in bits and pieces.

Hearst told 22News major online retailers like Amazon do collect a sales tax, but most of their sales are from third party sellers. That may change as state laws are modified.

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The Supreme Court just voted to close a loophole that has seen American consumers dodge billions in sales tax on online orders since 1992. Now, rivals will be charging sales tax where they hadn't before. For instance, the tax now could be collected from S.C. shoppers who shop online at outdoor retailer L.L. Bean.

This new ruling changes that.

Many brick and mortar stores have shut down in recent years as they've struggled to compete with online retailers.

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"It is going to squash the entrepreneurship, I just can not stress that enough", Christy Keyon, who owns Bird and Bean Coffee House and Naomi and Olive Gift shop said.

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