U.S. Supreme Court Decides To Pass on Sales Tax

in October with the U.S. Supreme Court to carry on their fight with New York about whether affiliate marketing constitutes nexus. The U.S. Supreme Court, however, has decided not to hear the case. Despite popular belief that this means internet sales tax is now a reality, nothing has changed and it’s still business as usual. When the U.S. Supreme Court decides to not hear a case, that isn’t a ruling one way or another but simply a non-action.

Although Forbes and other news outlets are stating that this changes the game for sales tax, there isn’t actually any change. The court could decide to hear another case filed with them in the future about sales tax and nexus issues, which could be as far way as twenty years or less than a year. Instead of making a decision, the U.S. Supreme Court has simply reaffirmed that it is up to Congress to sort this out at this time. If Congress makes a law that goes against the Constitution, then the U.S. Supreme Court might decide to get involved. So what does this mean for online retailers? Keep a vigilant eye on what’s going on in the states where you have customers, just as before. If you have a brick-and-mortar business, you also need to pay attention if you sell in other states.

States still have the power to determine what constitutes nexus in their state, just as it has been since 1992’s Quill case. The Marketplace Fairness Act is the only national legislation that might resolve the issues of online seller sales tax collection. Political pundits are expecting a change in the New Year in Congress with attention more focused on taxation—but we anticipate that income and capital gains taxes will probably steal the limelight and sales tax might be widely ignored. In any case, keep your eyes on sales tax news and make sure your company is aware of new laws that might affect your business processes.

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