Earlier today, the United States Supreme Court ruled that states are no longer prohibited from collecting sales taxes from internet retailers. The overturned case, Quill Corp. V. North Dakota, essentially had prevented states from collecting sales tax on e-commerce unless the seller had a physical presence in the state. Today’s ruling makes that approach obsolete. It is important to note the case applies to sales tax only and does not currently impact OTP or other excise taxes.
Today’s decision is widely considered to be a boost to brick-and-mortar retailers across all industries. Scott Pearce, IPCPR Executive Director, is optimistic about the impact of the ruling. “Today’s developments help bring equity to the retail space. IPCPR supports any development that supports and benefits our brick and mortar tobacconists.”
Ultimately, it will take some time for the effects of today’s decision to resonate in the marketplace. All states with the exception of Alaska, Delaware, Montana, New Hampshire, and Oregon currently collect a sales tax on in state purchases. After this ruling, IPCPR expects states to begin working on legislative and regulatory solutions to collect sales tax on out-of-state sales. IPCPR looks forward to remaining involved in these ongoing developments at the State and Federal level.
For questions concerning state sales tax and OTP tax issues, contact Rachel Hyde at Rachel@ipcpr.org.
For questions concerning today’s ruling and federal tax implications, contact Daniel Trope at Daniel@ipcpr.org.