In 1992, the Supreme Court set a precedent that prevented states from being able to force retailers to collect sales tax if they didn’t have a physical presence in the state. In a new ruling against Wayfair, Overstock.com, and Newegg initiated by South Dakota, this old precedent has been overturned. The ruling was made on June 21, 2018 by the US Supreme Court.
With states being able to force sales tax collection on out of state online retailers, we can only expect our online shopping experience to become a little more expensive. More states are to follow as this change can bring in billions of dollars in tax revenue, annually.
These changes, like new tax laws and rules to comply with, bring many obstacles for small businesses trying to get established online. It was once easy to start selling products online to anyone in the country, but now, having to figure out the sales tax on every product you are selling and having it comply with all the laws of the state you are selling in can deter merchants from even starting.
Many businesses find solutions by working with eCommerce based companies. These give businesses the support they need to easily work through situations like this, giving them room to put their time and efforts elsewhere.
Brian Roizen is the Cofounder and Chief Architect of Feedonomics, a full-service feed optimization platform that optimizes product data for hundreds of channels. He has been featured on numerous podcasts and eCommerce webinars, and regularly contributes to Search Engine Land and other industry-leading blogs. Brian graduated summa cum laude from UCLA with both a Bachelor’s and Master’s degree in Mechanical Engineering.
