Supreme Court's online sales tax ruling gives states a win

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North Dakota, which said mail orders from out-of-state companies didn't have to add sales tax.

States were missing out on around 25 percent of the tax from online sales, according to the Government Accountability Office, meaning $13 billion in missed sales. Amazon, which accounts for more than 40% of online retail sales, already collects sales taxes on direct purchases from its site.

"It was an issue of fairness since brick-and-mortar businesses must pay property and sales taxes while online retailers were exempt", said England, who serves as chairman of the House's appropriations committee.

A decision Thursday from the U.S. Supreme Court could mean increased revenue for Kentucky.

"The Indiana Chamber has been a long-time advocate for online sales tax collection; it is one of the key goals in our Indiana Vision 2025 plan".

Lawmakers in each state will first have to pass laws forcing online businesses to charge sales tax for all online purchases made in their state. In a press release, Governor Pete Ricketts said he would like to see the money used for property tax relief. While the e-commerce giant collects sales tax on all items it sells directly, third-party purchases are taxed in just two states, Washington and Pennsylvania.

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Why it matters: States had long complained that they were losing out on billions of dollars in lost tax revenues, and that the old rules failed to recognize the growing importance of the internet economy. The decision reversed a 1992 court decision that held that online retailers could only be required to collect and remit sales taxes if they had stores or some other "nexus" in states.

Bottom line: It's usually the case that buying something online is cheaper than buying it from a physical store.

The Supreme Court of the United States voted 5-4 to overturn the Quill vs. That was due to an outdated Supreme Court decision on sales tax collection.

The court decision was praised by Florida business groups.

Now it's up to Congress to figure out a system for interstate commerce that's simple enough for small businesses to manage while still allowing states to determine how taxes will be collected.

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