Bloomberg News/Landov
The Supreme Court handed states broad authority Thursday to require online retailers to collect sales taxes, overturning a pre-internet court precedent that had effectively exempted many merchants from collection duties.
The court, in a 5-4 decision written by Justice Anthony Kennedy, ruled that states can require internet merchants to collect the taxes even if the merchant has no physical presence in the state.
The ruling likely will spell the end of an era in which consumers could save on taxes by purchasing goods online instead of from local merchants.
The justices’ decision overturned a 1992 high court ruling involving mail-order businesses that said states can only require tax collection by merchants who are physically located in the state’s borders.
Popular on WSJ.com: