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High Court Decision Impacts Web Sales Tax [AUDIO]

A Supreme Court decision regarding state sales tax collection might portend big changes for online retailing, and in-store retailing.

Flickr User Silus Grok

The high court declined to hear a challenge to a New York law that requires web sales in the state to be taxed. States, like New Jersey, may reap big benefits in the future if they are allowed to tax web transactions.

Joseph Henchmen, of the DC-based Tax Foundation, said that could erase the web seller advantage over stores.

“When somebody comes in and buys something from a bricks-and-mortar, big box retailers, they have to collect sales tax. But when somebody goes online and buys it, the online company may not have to collect sales tax,” he said.

Henchmen says it could get really complicated if an online seller is located in one state, it’s mailing center is in another and its warehouse is in a third state. Some estimates say New Jersey could collect more than $200 million in online sales taxes that it is not receiving now.

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