Supreme Court Sales Tax Decision Likely to Cause MT Business Headaches
Montana businesses that sell products online may need to get to work soon to address some big changes in the digital marketplace that are expected after a Supreme Court Decision today, June 21. The case, South Dakota V. Wayfair allows states that have sales taxes, to collect those taxes from online sellers. University of Montana Adjunct Professor Travis Linneman has experience in running an online retail company in Montana and explains some of the work he expects Montana sellers will need to undergo.
"If you were to sell online and comply with the new Supreme Court decision, you would need to register with each state you ship to as a collector of sales tax and get a resale certificate from each of those states and there are 46 states that collect sales tax," Linneman said. "Then, you would need to have resale certificates to give to your wholesalers, or the people you buy from, so that they would be in compliance with the law as well... yeah, to fully comply with the rules if you are shipping to those 46 other states is going to be a lot of time and effort, just in the set up, and then continuously as you are sending off payments to these 46 other states."
The implications of the Supreme Court ruling will play out in the coming months and different states will likely have different levels of speed and severity in their attempts to enforce their state sales taxes on online retailers. Linneman expects a variety of responses from Montana businesses.
"I'd expect many of the real small ones will just buck the law and try to wait till someone tries to enforce it, the larger companies are going to have to comply because they are going to be the first targets for enforcement," Linneman said.
Montana Attorney General Tim Fox denounced the Supreme Courts decision, saying that it "upended decades of well established legal precedent,' and that it was "bad for Montanans purchasing products online from other sates" and " bad for Montana business selling products online." Montana was one of just two states with an Attorney General that filed briefs opposing internet sales tax.