E-Commerce Law: Will South Dakota V. Wayfair Ruling Burn Online Sellers?

e-commerce law south dakota v. wayfair impactIt finally happened. The Supreme Court of the United States overturned a longstanding interstate tax standard. The ruling could have a huge impact on e-commerce budgets. Online retail operators should take two minutes to read about the e-commerce law ruling to determine potential next steps.

The Basics: South Dakota v. Wayfair

Case: South Dakota v. Wayfair (Supreme Court of the United States)

Primary Legal Question: Can South Dakota collect sales and use taxes from e-commerce retailers from other states? Analysts dubbed the hypothetical interstate e-commerce levy the “Amazon tax.”

Winner: In the end, five justices sided with South Dakota and four with Wayfair. Majority rules; so, South Dakota nabbed the win in the judicial equivalent of a photo finish.
Next Logical Question: Does the ruling mean that every e-commerce business and individual seller that ships products to South Dakota must now remit taxes to the Mount Rushmore State?

Answer to Next Logical Question: No. Not every online seller must remit taxes to South Dakota; only retailers that sell more than $100,000 worth of goods, or more than 200 separate transactions, to South Dakotans must comply with the updated standard.

Will All States Follow In South Dakota’s Footsteps And Implement A So-Called “Amazon Tax”?

The SCOTUS “Amazon tax” ruling will likely inspire other states to craft e-commerce levies. After all, it’s a new source of income and SCOTUS, through this ruling, essentially green lit the practice nationally. At the time of this writing, some states have an e-commerce interstate tax and others do not. More are sure to follow.

Contact An E-commerce Law Attorney

If you’re just starting out in the e-commerce industry and need to sort your tax position, HT Law can help. We also work with online retailers who’ve been around for a while and are now in need of some business structure assistance.

Get in touch today. Look at it this way: You’ve got nothing to lose because the consultation is on us. We’re here to answer all your e-commerce law questions, provide transactional and compliance assistance, plus solve any online retail conflicts.



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