Online retailers are no longer exempt from not collecting sales tax on purchases in states where they have no presence, a Supreme Court decision handed down on Thursday that, experts say, could revitalize struggling brick-and-mortar retailers.
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“This is a great victory,” National Retail Federation CEO Matt Shay said during an interview with FOX Business’ Stuart Varney. “It’s been a long-time coming.”
The case, known as South Dakota vs. Wayfair, overturned a ruling from 1992 -- a time when e-commerce accounted for far less of the economy. Since then online retailers such as Amazon have seen explosive growth.
The decision was applauded by brick-and-mortar retailers, including Walmart, who have long said they were disadvantaged under the previous law because they have to charge sales tax, while online retailers did not in states where they had no physical presence.
“It rebalances things, in a way that creates equity and parity across all these businesses that are out there competing for consumers,” Shay said. In the fourth quarter of 2017, e-commerce sales increased to $119 billion, up more than 3% from the previous quarter and nearly 17% from a year earlier, according to U.S. Census Bureau data.