Ruling paves way for widespread online sales tax

Posted at 4:45 PM, Jun 21, 2018
and last updated 2018-06-21 21:07:55-04

Paying sales tax for online purchases could soon become widespread, due to a Supreme Court ruling Thursday.

The court overturned a 1992 decision, Quill v. North Dakota, that blocked states from charging sales tax to online purchases when the seller doesn't have a physical presence in the state. It's something brick and mortar retailers have been seeking for years. They say it helps level the playing field.

Now, state's are expected to quickly enact laws that set minimum sales dollar amounts to trigger tax collection, said Steve Gill, a professor of accountancy at San Diego State University. 

However, the changes are creating questions among local San Diego retailers who sell on the Internet. Mike Dicerbo, owner of Friction Jewelry, said he already collects sales tax in California, New York, and Pennsylvania - a hassle in and of itself. 

"People will abandon their carts when they realize that they're buying something from California and they're in Kansas and it's costing them whatever their local sales tax is," he said. 

Chelsea Menshek, owner of Modern Day Hippy, also out of Liberty Station, said collecting sales tax is already confusing, and that remitting to 50 states could make it even harder.

"It's really tricky," she said. We are a small business, we don't have that technology to figure out where that person is coming from to charge them the correct tax."

Gill said he expects states to enact new laws within six months to start collecting.