By Sam Baker | Axios
The Supreme Court today paved the way for states to begin collecting sales taxes from online vendors. In a 5-4 decision, the court threw out a precedent that had blocked online sales taxes.
Why it matters: Online retailers likely will have to pay billions more in taxes each year. Although some large online retailers like Amazon already collect sales taxes, smaller vendors don’t.
The big picture: The high court ruled in 1992 that states could only collect sales taxes from entities with a “physical presence” in the state. It overturned that ruling today, calling it “unsound and incorrect.”
The Trump administration had sided with brick-and-mortar stores that brought the case, arguing that states should be allowed to levy sales tax.
What to watch: The ball is in Congress’ court to create national standards around interstate commerce to avoid a patchwork of state sales tax laws that can be difficult for retailers (especially small businesses) to navigate, tech and free-market groups said.
What’s next: If the court is catching up to modern technology, even at the expense of its own precedents, that could have big implications for other outstanding cases, including a potentially landmark case about law enforcement’s ability to track the location of people’s cell phones.
Go deeper: Here’s a primer on the case.
“Technology has shaped commerce since the dawn of man, whether it was the invention of the wheel or the internet. With this decision, the law is catching up to the times. The practical results of the decision appear to be somewhat predictable, but it will be interesting to see how it truly affects businesses and consumers moving forward.”
