The retailers refused to collect sales tax - citing a 1992 law that prohibited states from collecting sales tax from retailers that did not have a "physical presence" in their state, such as a store, warehouse or sales representatives.
In anarrow 5-4 ruling, the Supreme Court of the United States on Thursday overturned a landmark precedent in the e-commerce sales tax debate, thereby striking down a law that previously only mandated that companies with a physical presence in a state must collect and remit sales tax.
The case, known as South Dakota vs. Wayfair, overturned a 1992 ruling made by the high court at a time when e-commerce made up a much less significant portion of the economy. The Louisiana Department of Revenue says the state already has a system in place to collect online sales tax. Among other technical and practical reasons cited by the majority for its decision was the argument that no-sales-tax rules hurt state revenues supporting schools and services. So far, more than 250 companies have registered to collect sales taxes on MA consumers as a result, although the rule remains subject to a court challenge by Crutchfield, an out-of-state electronics retailer.
Justices Anthony Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito, and Neil Gorsuch delivered the opinion while John Roberts, Stephen Breyer, Sonja Sotomayor, and Elena Kagan dissented. Now that consumers make a growing share of their purchases online, states said that cost them billions annually in potential sales tax revenue.
We're likely to see this issue addressed legislatively next session.
A Trump Organization representative did not respond to a request for comment from Business Insider on how the Supreme Court decision could affect TrumpStore.com.
Buyers have to pay sales tax if they are shopping from a big box store online because many have stores in every state.
The case the court ruled in has to do with a law passed by South Dakota in 2016. It also impacts Amazon, but only for the goods it sells from third-party merchants.
Now it's up to Congress to figure out a system for interstate commerce that's simple enough for small businesses to manage while still allowing states to determine how taxes will be collected.
Internet companies opposed to the South Dakota law appealed.