South Dakota e-commerce sale tax fight reaches U.S. Supreme Court

WASHINGTON (Reuters) - A high-stakes showdown at the U.S. Supreme Court on Tuesday will determine whether states can force out-of-state online retailers to collect sales taxes in a fight between South Dakota and e-commerce businesses.

South Dakota is asking the nine justices to overturn a 1992 Supreme Court precedent that states cannot require retailers to collect state sales taxes on purchases unless the businesses have a “physical presence” in the state.

The state, appealing a lower court decision that favored Wayfair Inc (W.N), Overstock.com Inc (OSTK.O) and Newegg Inc, is being supported by President Donald Trump’s administration.

A ruling favoring South Dakota could help small brick-and-mortar retailers compete with online rivals while funneling up to $18 billion into the coffers of the affected states, according to a 2017 federal report.

Read more: https://www.reuters.com/article/us-usa-court-taxes-preview/south-dakota-e-commerce-sale-tax-fight-reaches-u-s-supreme-court-idUSKBN1HM0G1