Supreme Court will Decide if Online Retailers Must Collect Sales Tax

The U.S. Supreme Court has agreed to hear a lawsuit brought by the state of South Dakota challenging a 26-year-old ruling that has prohibited state and local government from collecting sales taxes from online merchants and other remote sellers. 

South Dakota contends that the 1992 ruling is obsolete in the e-commerce era and should be overturned.  Online retailers Wayfair, Overstock and Newegg are arguing that the ban should remain in effect unless Congress passes legislation that overrides it. 

The Government Accountability Office estimates that state and local governments could have collected up to $13 billion more in 2017 if they’d been allowed to require sales tax payments from online merchants and other remote sellers.