News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

Supreme Court May Not Rule in E-Commerce State Sales Tax Matter

Supreme Court May Not Rule in E-Commerce State Sales Tax Matter

A case before the U.S. Supreme Court that could result in e-commerce companies being required to collect state sales taxes has not been resolved, but questioning indicates the court may punt the issue back to Congress, according to a Reuters report. Since 1992, e-commerce companies have only been required to collect state taxes in jurisdictions where they have a physical presence. Cash-strapped states are asking the court to let them force online sellers to collect state sales taxes on any purchase delivered to the state.

According to observers in the courtroom, the comments of several justices seemed to indicate the court feels the 1992 precedent is obsolete and that a remedy to the current situation is required. Most of the justices, however, seem to think that the number of competing interests and the uniqueness of e-commerce make the problem more suited for resolution by Congress than by a decision enforced by the court.

Retailers are even pitted against each other in the case. Many online businesses already collect state taxes in most or all states, but some online-only retailers are still resisting. If the Supreme Court chooses not to rule, states most likely will need action from Congress to change the law.

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