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The Supreme Court can collect rules States that the VAT for online purchases nationwide

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Online shoppers could find, costs are rising, after the Supreme court had on Thursday with a decades-old precedent limiting the ability of States to collect that sales tax on certain out-of-state shopping on the Internet.

The 5-4 decision called the current rules “frivolous and false”.

Currently, the delivery of a product company to a different state where there are no “physical presence” – a business, office or warehouse — are not forced to collect the state sales tax.

You give a victory to the States, said the high court, the rule is obsolete.

To be considered “when the day-to-day functions of marketing and sales in the modern economy, it is more than obvious that the physical presence of the rule is artificial, and wrote, in its entirety,” Justice Anthony Kennedy.

The current regulation “allows the remote to escape from sellers, an obligation for the adoption of a lawful state tax is unfair and unjust,” added Kennedy. “It is unfair and unjust to competitors, local and out-of-state, must remit the tax to the consumer, pay the tax; and to the States that you are looking for fair enforcement of the tax.”

A coalition of small business owners, a lot of offer their online goods from home offices, to say that their profits would evaporate if forced to comply with complex tax rules in all 50 States.

However, in the majority of States, who say they lose billions in revenue, and they are supported by many large, so-called brick-and-mortar retailers such as Wal-Mart, which pay VAT, regardless of whether your sales are made in stores or online.

E-commerce now makes up about 10 percent of U.S. retail sales, according to the Commerce Department.

South Dakota leads the legal charge, passing a law, which is the collection of sales tax on Internet service providers with at least 200 annual transactions, or US $ 100,000 in revenue for its residents.

Forty-one States, the effort to say the problem is getting worse as e-commerce continues to grow nationwide. They argue that the tax-collection software makes it easier for the traders, large and small, to fulfil their tax liabilities, which vary from state to state and from product to product.

But many online sellers, such as Etsy or EBay, which serve as a third party portal for thousands of small homegrown businesses that are not VAT point numbers-confusing tax laws that could put you on expensive audits for all of the shortfall in revenue.

As an example, the lawyers for the online retailer told the high court in Illinois, a Snickers bar costs bar more in taxes than a Twix, because food is not treated with of flour, as well as candy for tax purposes. Customers in most cases should pay the tax themselves, but both sides of the debate admit, only a few actually do.

And several judges in an intense hour of oral arguments on Tuesday expressed concern about the circulation of the precedent, despite the fact that it was decided before the digital age.

Some of the Bank said that the Congress ” refusal in the course of the years, a sign the status quo should be maintained.

Amazon, by far the country’s largest online seller who is not a party to the case, because it now has a physical presence in many States, with warehouse and pays the taxes.

The high court has said, since more than 50 years in various judgments that the member States, not the collection of taxes by sellers with no “physical presence” in the member States. That precedent has been maintained in a key 1992 ruling.

The Congress two decades ago freed most of the online providers. But as the e-commerce has developed a platform that more of the larger online retailer have begun the payment of the sales tax — owed about 90 percent of the revenue.

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