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Online shoppers to pay sales tax

On a 5–4 decision, the U.S. Supreme Court closed a loophole that has existed since 1992 regarding state sales taxes collected from online sales. The Court’s ruling allows states to force online retailers to collect sales tax from consumers who make some purchases online. At the time it was written, nobody foresaw the future impact of online sales, and the law barred states from collecting sales taxes if the online retailer didn’t have a substantial physical presence in the state.

As online sales skyrocketed worldwide through the years, states argued that they were losing billions every year by not being able to collect sales taxes from online purchases. While consumers were supposed to report any unpaid sales taxes from online purchases on their annual tax returns, they often failed to do so.

The Supreme Court’s reversal of the 1992 law means Wisconsin could generate around $187 million annually if implemented. According to a Wisconsin State Journal report, Gov. Scott Walker, the Department of Revenue, and the Legislative Fiscal Bureau are studying the issue further. Walker and Republicans would like the money to be applied to reducing property taxes, while Democrats would prefer it be spent on schools, roads, and other needs.

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