Sales tax

Go deeper: How the online sales tax ruling will affect consumers

Supreme Courthouse
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.

Supreme Court opens the door to online sales taxes

People walking in front of the Supreme Court
Photo: Chip Somodevilla/Getty Images

The Supreme Court today paved the way for states to begin collecting sales taxes from online vendors. In a 5-4 decision, the court threw out a precedent that had blocked online sales taxes.

Why it matters: Online retailers likely will have to pay billions more in taxes each year. Although some large online retailers like Amazon already collect sales taxes, smaller vendors don't.