Brick-and-mortar stores grabbed a lifeline from the U.S. Supreme Court ruling web-based retailers need to collect and send sales taxes to states, a long-awaited decision that merchants say will level the playing field with their online competition.
Bill Rennie of the Massachusetts Association of Retailers said the court’s ruling in South Dakota v. Wayfair is “welcome news” after years of online stores being able to flout state tax collectors.
“Retailers across the country have been fighting and waiting for a level playing field for decades now, and this ruling today finally is going to bring that to fruition,” Rennie told the Herald.
The decision overturned a 1992 case that required companies to have a physical presence in a state before they’d need to collect sales taxes on purchases. Reversing that requirement, Rennie said, recognizes that the internet and online sales have fundamentally changed the economy.
For years, stores have lamented how consumers would come in, try out items, ask staff questions, then leave without making a purchase — planning to buy the thoroughly tested item online.
The American Booksellers Association, which represents 2,300 bookstores across the country, called the ruling a “tremendous victory for independent booksellers and for indie retailers.”
“There is simply no way to overstate the importance of the decision handed down by the U.S. Supreme Court,” said Oren Teicher, CEO of the bookseller association. “This victory is a testament to the hard work and perseverance of independent booksellers, who began advocating on behalf of sales tax fairness almost two decades ago.”
The booksellers called the law overturned yesterday an “existential threat to independent bookstores” in a filing in the Supreme Court case. The stores, which operate on already thin margins, cannot lower their prices to compete with online retailers that also do not have to collect a sales tax.
National Retail Federation head Matthew Shay said the decision was long-needed to address competitive disadvantages.
“Retailers have been waiting for this day for more than two decades,” he said. “The retail industry is changing, and the Supreme Court has acted correctly in recognizing that it’s time for outdated sales tax policies to change as well.”
