Supreme court rules to collect sales tax

The Supreme Court ruled states can force online shoppers to pay sales tax. In a 5-4 ruling, the court overturned a 1992 court precedent barring states from requiring businesses that have no physical presence in the state to collect their sales taxes.

The 5-4 ruling Thursday is a win for states, who said they were losing out on billions of dollars annually under two decades-old Supreme Court decisions that impacted online sales tax collection.

Justice Anthony Kennedy wrote that the previous decisions were flawed.

“Each year the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the States. These critiques underscore that the physical presence rule, both as first formulated and as applied today, is an incorrect interpretation of the Commerce Clause,” he wrote.

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