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After Online Tax Ruling, Etsy and eBay Look to Congress for Relief

By George Khoury, Esq. | Last updated on

The recent SCOTUS ruling clearing the way for states to charge sales tax to out of state online retailers without any physical presence in a state is making big waves, as expected.

While the decision really only clears the South Dakota law, the majority opinion provides much guidance for other states, suggesting that the limits placed by South Dakota on which businesses have to pay are rather instructive. In response to the opinion however, there has been a strong push from small business, big online retailers, and small-time sellers, for Congress to act to protect small online business interests.

If You Can Make, You Can Charge Sales Tax for It on Etsy

As most commentators are pointing out, the burden of charging and collecting the sales tax is likely going to fall on the big online marketplaces and retailers that allow individual sellers and small businesses to participate. Etsy, eBay, and Amazon's Marketplace are perhaps the three biggest examples. Although the sellers may have to deal with some extra paperwork at the end of the tax year, for the most part, the online small businesses that use one of the big platforms will have much less of a burden complying.

Advising Retail Clients

If you counsel clients that run their own retail website, it might not be a bad idea to ping them to ensure they are keeping up to date on this as it unfolds. Other states, including Washington, have similar laws, and some have an even weaker/lower threshold.

eBay Petitioning for the People

Today, eBay users were greeted by an email requesting they sign a petition urging Congress to act in response to the Wayfair decision. And a board member of made the following statement: "Unless Congress responds, the Court's ruling may remove key entrepreneurial opportunities before they even get out of the heads of the inventors."

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