After High Court Ruling, Whats Ahead for Online Sales Tax?
Now that the Supreme Court has made it easier for states to require most online sellers to collect sales taxes, how will states and Congress respond?
At a recent Tax Policy Center event, Senator Heidi Heitkamp (D-ND), a leader in a long-standing effort to create congressional rules for online sales tax collections, said that Washington should now take a back seat to the states.
At the event, a panel of tax experts predicted that states would likely act within the next year to 18 months to expand their collections requirements.
The court’s 5-4 ruling said states could require online retailers to collect sales taxes even if they don’t have a physical presence, such as a store or warehouse, in the jurisdiction. But the Court didn’t give states carte blanche. It set out two overriding principles: A state tax system should not discriminate against out-of-state businesses, and it should not place an “undue burden” on interstate commerce.
Online sellers are on the defensive and are likely to push states to reach consensus on key compliance issues. State efforts are not likely to result in a single uniform tax base, and they surely won’t set one tax rate. But they should be able to make life easier for e-tailers to meet the Supreme Court’s standards.
Source: Tax Policy Center