U.S. Supreme Court Clears the Way for Local Governments to Collect Sales Tax from Online Retailers
On June 21, 2018, the United States Supreme Court ruled 5-4 in theSouth Dakota vs. Wayfair case, to strike down the court’s 1992 physical presence standard set forth in the case, Quill Corp. v. North Dakota. The Quill ruling exempted any out-of-state (internet and catalog) retailers from collecting state and local sales and use tax.
The Missouri Department of Revenue (MoDoR) is currently examining the Supreme Court ruling to determine if state legislative action is needed to implement the ruling. It is very likely that the Missouri General Assembly will need to act before the state and municipalities will see any additional revenue. We will distribute MoDoR’s report on the implementation of South Dakota vs. Wayfair ruling as soon as we receive it.
This significant ruling paves the way for expanded collection of state and local use tax. Under the earlier Quill case, sales and use tax collection had been limited to companies with a physical presence within the state. The ruling opens the door for expanded collections. However, under current law, Missouri municipalities will still need a use tax to see any revenue increase from this decision.