THE Supreme Court of the USA is reported to have agreed to revisit its 26-yr-old decision relating to the levy of sales tax on online sales. It was the historic South Dakota case in 1992 when it had ruled out the imposition of tax on online retailers.
With several States raising the din over a revisit of the old order as e-commerce has ballooned into several trillion dollar business, the Apex Court has agreed to revisit its ruling. And the assessee involved in this case was a mail order company. And the ruling was that the tax was to be collected only where the company had its physical presence (principle of PE was applied).
Certain studies which are being reported are that if the States and local governments would have been allowed to tax e-commerce, they would have collected more USD 13 bn more in 2017 alone. Five States in the USA levy sales tax on online retailers and a reversal of the old ruling may impact large players like Amazon.
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