Supreme Court allows states to collect sales taxes on more online transactions

A closely divided Supreme Court upended the nation's Internet marketplace Thursday, ruling that states can collect sales taxes from online retailers.The decision, which overturns an earlier Supreme Court precedent, will boost state revenues at the expense of consumers and sellers who have avoided sales taxes in the past. But the justices did not specify what types of exceptions states may impose to limit the burden on small businesses.

Justice Anthony Kennedy wrote the 5-4 decision, jettisoning the court's longstanding rule that states cannot require companies without a physical presence to collect sales taxes. He was joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch.

"The Internet's prevalence and power have changed the dynamics of the national economy," Kennedy wrote. "This expansion has also increased the revenue shortfall faced by states seeking to collect their sales and use taxes."

Chief Justice John Roberts dissented, saying the decision should be left to Congress, and was joined by Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan.
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