June 21, 2018

The U.S. Supreme Court ruled Thursday that states can collect sales tax from online retailers, a victory in a case brought by South Dakota.

“Today’s landmark decision is a win for South Dakota and for Main Street businesses across America that will now have a level playing field and tax fairness,” Attorney General Marty Jackley said in a statement.

Jackley argued before the high court in April, challenging the Quill Corporation v. North Dakota decision on tax fairness, which forced retailers to collect state sales tax on online purchases only if they had a bricks-and-mortar location in that state.

In the 5-4 ruling Thursday, the justices upheld a 2016 South Dakota law that requires online merchants with more than $100,000 in annual sales to state residents or 200 transactions with state residents to collect sales tax.

Even with the favorable ruling, the National Retail Federation believes federal legislation is necessary to spell out details on how sales tax collection will take place rather than leaving it to each of the states to interpret the court’s decision.

“While today’s decision is a major victory, there’s still work to be done,” said Matthew Shay, the organization’s president and CEO. “Congress must now follow the court’s lead and pass legislation implementing uniform national rules that provide consistency and clarity for retailers across the country.”