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California was already trying to wring more tax out of online retailers months before the Supreme Court handed down a ruling that gave states permission to do so. Last fall, more than 2,500 online retailers with out-of-state addresses received letters from California's Department of Tax and Fee Administration informing them that they appeared to owe sales tax here.
The U.S. Supreme Court has made an overdue break with precedent and set the stage for more fairness in the taxation of certain forms of electronic commerce.
Wayfair . The online seller, along with Overstock.com and Newegg, challenged a new South Dakota law that requires remote taxpayers to collect the state's sales tax if they sell more than $100,000 of goods per year into the state or, regardless of dollar amount, have more than 200 transactions with state residents.
President Donald Trump's latest Twitter punching bag has been the online retailer Amazon, which he accused of paying "little or no taxes to state & local governments." The accusations were misleading, but they sparked a national discussion over online sales taxes.
The Supreme Court will decide whether to expand the power of the states to collect sales tax from online sales, which could precipitate a vast increase in internet sales tax. The justices announced Friday that they will take a challenge to a 1992 precedent which allows states to collect sales taxes only from those companies with a physical presence in their jurisdiction.