States can now force online retailers to collect sales tax, and that can impact millions of workers that are doing “brick and mortar” retail job that represent current or potential manufactured home buyers.
The high court ruling earlier today reverses a Supreme Court in 1992 ruling. That prior decision – in Quill Corp. v. North Dakota, back when e-commerce made up a much less substantial portion of retail sales – kept states from collecting sales tax from online retailers where they have no physical presence.
“The ruling – in South Dakota vs. Wayfair Inc. – means a state will be able to tax all online purchases made by its residents even for a transaction carried out beyond its borders. In some cases, such a change could raise prices for consumers shopping online,” said Fox Business.
E-commerce sales in the fourth quarter of 2017 increased to $119 billion, up more than 3% from the previous quarter and nearly 17% from a year earlier, according to U.S. Census Bureau data said Fox Business. “Online sales comprised more than 9% of total sales in the U.S.”
The Trump administration backed South Dakota in the case, by arguing that the high court could not have expected how rapidly e-commerce would expand when it made the 1992 ruling.
“In light of internet retailers’ pervasive and continuous virtual presence in the states where their websites are accessible, the states have ample authority to require those retailers to collect state sales taxes owed by their customers,” U.S. Solicitor General Noel Francisco said in a friend-of-the-court (“amicus”) brief.
During an interview with FOX Business in April, National Economic Council Director Larry Kudlow said changing the law could level the playing field between traditional and e-commerce retailers.
“There was a time when we wanted the United States, as a matter of policy, to protect nascent internet businesses by keeping down the tax burden, but that time is long gone,” Kudlow said. Kudlow is a pro-growth economist, who served in the Reagan Administration. He was recently hospitalized for a heart condition. Kudlow’s expected back at work, perhaps by next week.
The move is likely to protect jobs of brick and mortar retailers, which have increasingly been under pressure by online retailing companies. In that way, it should continue to support the growth experienced under the Trump economic boom, which in turn should be good for manufactured home sales. ## (News, analysis, and commentary.)
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