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MIDVALE — Utah-based online retailer Overstock.com will voluntarily begin collecting sales tax following the Supreme Court’s Thursday ruling that allows states to force e-commerce companies to charge the tax.
Overstock will collect sales tax on purchases made by consumers in more than 12,000 different U.S. tax jurisdictions, the company said in a news release Monday.
The e-commerce retailer will also expand its “physical and digital operations” into states where tax concerns previously prevented the company from having a “direct presence,” the news release said.
The retailer’s announcement comes four days after a 5-4 ruling by the Supreme Court that revived a South Dakota law enacted in 2016 that required larger, out-of-state e-commerce companies to collect sales tax if they amassed $100,000 in sales or 200 separate transactions, according to The Associated Press. Overstock challenged the law, along with fellow online retailers Wayfair and Newegg.
High Court: Online shoppers can be forced to pay sales tax
States will be able to force more people to pay sales tax when they make online purchases under a Supreme Court decision Thursday that will leave shoppers with lighter wallets but is a big financial win for states.Now all states will most likely require online retailers to collect the tax.
The law previously required online businesses to collect sales tax only if they had a physical presence in the state. Until now, many online sellers that had a physical presence in only a few states weren't collecting sales tax. Customers were often responsible for paying the sales tax to the state, but most didn't realize they owed the money.
Overstock is now expected to expand to states the company avoided in order to bypass charging sales tax.
“Overstock continues to urge Congress to legislate a fair and equitable solution for sales tax law that takes into account the best interests of both consumers and entrepreneurs,” the company said in its news release.
The Supreme Court’s ruling is a loss for customers who will end up paying more and smaller e-commerce companies whose no-sales-tax policies gave them an advantage over brick-and-mortar stores and larger online retailers that were already collecting sales tax because of their widespread presence.
The decision is a win, however, for brick-and-mortar stores, online retailers that were already collecting the tax and states that claim they've missed out on billions of dollars of revenue annually as shopping habits shift to the web.
Utah, along with 12 other states, enacted a multi-state sales tax amnesty agreement in August 2017 that allowed online retailers like Amazon to start collecting tax from those in the state without having to account for the tax they should have charged before.
Online sales tax amnesty program launched in 13 states, including Utah
A new multistate sales tax amnesty agreement will allow online sellers in several states, including Utah, to collect sales tax in an effort to increase conformity nationwide.Now Utah can require all online retailers to charge the tax.
