The U.S. Supreme Court stayed out of the multibillion-dollar fight over Internet sales taxes, leaving intact a New York law that forces Amazon.com Inc. to collect sales tax from customers in New York. The Supreme Court rejected appeals requests by Amazon and Ovestock.com Inc. This decision levels the playing field between e-commerce and brick and mortar stores.
Many people have preferred internet purchases over the past few years because they save as much as 10% on sales tax. Sales tax savings often exceed shipping and handling charges. With many retailers, shipping costs are free with a minimum purchase so the sales tax savings are perceived as a direct “discount”.
Internet retailers have lower overhead, making it hard for brick and mortar stores to compete. But brick and mortar stores provide jobs and sales tax revenue, benefitting the local community. Supporting these stores is good business.
The state tax revenues will be significantly impacted by closing this sales tax loophole. This should help the distressed government entities and local economic climate.