Supreme Court hears challenge to union fees and reviews latest travel order.
It ruled that the provision amounted to a "judicially created tax shelter" that put some companies at an advantage. The decision overturns a 1992 ruling that prevented the practice.
States have argued that they are missing out on a serious chunk of revenue, while brick-and-mortar retailers say they are at a disadvantage compared with e-commerce companies because they have to charge sales tax at the time of purchase. Amazon stock is down over 1.2%.
The win was welcomed by groups representing brick-and-mortar retailers and decried by e-commerce advocates. The cases the court overturned said that if a business was shipping a product to a state where it didn't have a physical presence, such as a warehouse or office, the business didn't have to collect the state's sales tax.
South Dakota concluded in 2016 that the explosion in online sales changed the market dramatically.More news: China spells out tariffs it plans on US goods
Forty-five states rely on sales taxes for revenue, and for those states that have no income tax, sales taxes are very important.
After states and traditional retailers have grumbled about this situation for years, South Dakota finally chose to do something to change it. 106, §5. Third, South Dakota is one of more than 20 States that have adopted the Streamlined Sales and Use Tax Agreement. Although technically consumers are required to pay sales tax on all purchases, it is practically impossible to collect without the retailer applying it at the point of sale.
Shares of Amazon, Overstock.com, Etsy, Wayfair and other retailers fell after the ruling was announced.
In the digital era, the costs of complying with different tax regimes "are largely unrelated to whether a company happens to have a physical presence in a state", Kennedy wrote. The state enacted a law requiring out-of-state sellers to collect and send it sales taxes, but only if they deliver more than $100,000 of goods or services into the state or make 200 or more transactions.