How A Supreme Court Decision Could Mean Billions For Texas

A ruling requiring more online retailers to pay taxes to states where their goods are sold could dramatically increase sales tax revenue.

By Paul FlahiveMay 30, 2018 9:30 am| , , , ,

From Texas Public Radio:

In 1992, North Dakota wanted Delaware-based Quill Corp to pay taxes on catalog sales to its residents. The Supreme Court said it didn’t have to since it didn’t have a physical presence in the state.

“Quill made sense In 1992, it doesn’t in 2018,” said George Kelemen, CEO of the Texas Retailers Association.

A lot has changed in 26 years, he said, which was two years before the first online sale in history.

Now, according to the Department of Commerce, more than 13 percent of all retail sales in the U.S. are online, at an estimated $450 billion.

As a result, South Dakota passed a law to tax online sellers last year and now South Dakota vs. Wayfair is at the Supreme Court.

Ultimately, Kelemen says this is about fairness and the current system puts brick-and-mortar retailers at a disadvantage – “8.25 percent of a disadvantage, when it comes to competing with someone out of state.”

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