A Supreme Ruling on Sales Tax

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Wondering why your local hardware store held a Project X-style rager last night? The Supreme Court handed down a major ruling that gives states the authority to require e-commerce companies to collect sales tax on online purchases (a big win for brick-and-mortar). They weren't allowed to before?  Nope. In 1992, this very same Supreme Court ruled that states could force retailers to collect sales tax only if they had a "physical presence" in the state. So while e-commerce companies sell goods all across the country, they weren't required to collect taxes unless they had a warehouse or an office in that particular state. That is until yesterday. The decision overturned the 1992 ruling because it was "unsound and incorrect." Translation: It's time we recognize online retail as a significant (and growing) sector of the marketplace. Or, as Justice Anthony Kennedy put it, "The Internet's prevalence and power have changed the dynamics of the national economy." Let's talk winners and losers Winners: States: They'll be able to bring in revenue they previously missed out on (government estimates peg it at between $8-13 billion). Brick-and-mortar stores: They felt like they were put at a huge disadvantage when it came to taxes. So your disgruntled local store owner will view this as a huge step towards leveling the playing field. Amazon: We know, we know, it sounds crazy. But Amazon already collects sales tax on goods it sells directly. And with this ruling squeezing smaller e-commerce players (see below), Amazon stands to tighten its grip on the online shopping world. Losers:  E-commerce companies: Especially the smaller ones. They'll now be required to navigate a spider web of complicated tax laws across thousands of jurisdictions. Some won't have the capacity to make it work. Congress: Only because they'll have more homework. They've puntedon interstate commerce issues for years, so maybe this ruling will finally drive them to action.