Kosewicz pays $3,600 a year for tax collection software to handle payments and reports to her home state, Washington.
A ruling by the U.S. Supreme Court that says states are allowed to collect taxes from online sales could boost Virginia's tax revenues by up to $300 million a year.
So as online retail has grown, states have sought increasingly clever ways to force out-of-state sellers to collect sales tax where they know their own residents are unlikely to pay use tax. Those retailers understandably have had concerns over the years when they faced increasingly intense competition from online sellers who, in some cases, boasted that purchases from their sites were not subject to the same taxes that would need to be added to the price of the same goods from a local store. It's been a long-running issue for Utah, which has claimed a loss of more than $200 million in sales tax revenue from online purchases by consumers.
"This will level the playing field between online sellers and brick-and-mortar stores", was the phrase echoed by five state and local officials.
The cases the court overturned said that if a business was shipping a product to a state where it didn't have a physical presence such as a warehouse or office, it didn't have to collect the state's sales tax. B&H doesn't require that buyers pay sales tax if they place orders outside of NY or New Jersey, and while you're supposed to later pay those uncollected funds when tax time comes around, the vast majority of people don't. Some experts think states will need to pass additional legislation to collect more tax on online purchases, which could take some time. "This is a big win for states that now they are able to tax more broadly". NY and California's rules are more complex, and those states have sought to increase sales tax collection by using broader definitions of what it means to do business within their borders. Amazon collects sales tax from customers in the 45 states that have a sales tax.
"As a regional destination for working, eating, entertainment, and shopping, sales tax revenue is a major part of how we operate our government and improve our community", said Chris Floore, assistant to the county manager for public affairs for Macon-Bibb County. Some shoppers may not notice, or care, analysts say. South Dakota, and held that "physical presence" is not necessary before States can validly apply their taxing powers to businesses that have neither persons nor property in a State but nevertheless conduct substantial business in that State. "I don't have to drive", said Thornsberry.
"New York and California would likely have to make some pretty big changes", said John Buhl of the Tax Foundation. Some states have exemptions for collecting sales tax. Under the agreement, retailers can use a sales tax compliance service of their choice without charge for transactions in the participating states, according to Craig Johnson, executive director of the Streamlined Sales Tax Governing Board.
But to brick-and-mortar stores, the ruling righted a decades-old imbalance that favored internet retailers and led to the demise of thousands of merchants.