States Want to Force Online Retailers to Collect Billions in Sales Tax
- As Amazon watches, South Dakota battles Wayfair, Overstock.com
- Justices asked to reverse decision exempting many online sales
Photographer: Ken James/Bloomberg
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Overstock.com has a small but unmistakable advantage for anyone looking to buy a 3-cup Cuisinart Mini Prep Plus Food Processor for shipment to Germantown, Maryland: Purchasers don’t have to pay the 6 percent sales tax they’d owe at a local store.
That sort of discrepancy is at the heart of a multibillion-dollar U.S. Supreme Court case set for argument Tuesday. States and traditional retailers are asking the court to overturn a 26-year-old ruling that exempts many internet merchants from collecting billions of dollars in sales taxes. The 1992 decision says retailers can be forced to collect the tax only if they have a physical presence in a state, such as a store or warehouse.