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Visitors line up outside the U.S. Supreme Court plaza before the court handed down decisions June 18, 2018. (Photo by Chip Somodevilla/Getty Images)

The Supreme Court ruled 5-4 Thursday to allow states to collect sales tax from online and out-of-state retailers.

Why it matters: As the U.S. tries to catch up with digital companies that operate without a physical presence, the ruling allowing states to tax e-commerce providers outside their state borders has created an extra hurdle for companies handling online transactions. The ruling may prompt Congress to introduce new legislation for an overhaul on unifying e-commerce for all 50 states.

The details: Currently, 45 states collect sales tax. Major e-commerce sites like Amazon and Nordstrom already have sales tax built into consumers’ purchases, and are equipped to deal with the complexity, while others will have to adapt to the changes.

What's next:

  • Companies, especially small and medium-sized, will have to automate collection efforts to keep track of sales.
  • However, the ruling recognizes the limitations smaller businesses may have, and exempted businesses that make less than $100,000 in annual sales or less than or equal to 200 transactions.
  • Consumers will have to pay the sales tax on e-commerce items. E-commerce sites will be treated as if it were brick-and-mortar.

What's next: Many major online retailers are looking to Congress to clarify the ruling with a framework to defend small businesses and provide uniformity and consistency, said Eric Fader, a managing director in BDO’s SALT practice.

What they’re saying:

  • Etsy CEO Josh Silverman said in a statement that the decision was not the side they backed, highlighting concerns for small businesses that use Etsy.
  • eBay called for Congress to create a small business exemption “to help small businesses take advantage of the internet to grow and create local jobs.”
  • President Trump tweeted his approval for the ruling, saying it a "big victory for fairness and for our country. Great victory for consumers and retailers."

Go deeper: Supreme Court opens the door to online sales taxes

Go deeper

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An activist holds a placard highlighting China's Tiananmen Square massacre as pro-democracy media tycoon Jimmy Lai arrives at West Kowloon Magistrates' Court in Hong Kong in November. Photo: Isaac Wong/SOPA Images/LightRocket via Getty Images

Hong Kong media tycoon Jimmy Lai is being detained until an April court hearing after the pro-democracy supporter was charged Thursday with fraud, per his Apple Daily news outlet.

Why it matters: The 72-year-old's arrest and denial of bail is another blow for the pro-democracy movement in the former British colony amid concerns about a fresh crackdown on activists.

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Why it matters: Republicans are ready to test whether Trump's threats of vetoing the bill, which has passed every year for more than half a century, are empty.

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Sidney Powell. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

President Trump has rarely met a conspiracy theory he doesn't like, but he and other Republicans now worry the wild tales told by lawyers Sidney Powell and Lin Wood may cost them in Georgia's Senate special elections.

Why it matters: The two are telling Georgians not to vote for Republicans David Perdue and Kelly Loeffler because of a bizarre, baseless and potentially self-defeating theory: It's not worth voting because the Chinese Communist Party has rigged the voting machines.