The U.S. Supreme Court has ruled that states can require online retailers to collect sales taxes.

In the decision of South Dakota v. Wayfair Inc. on Thursday, June 21, the Supreme Court overturned Quill Corp. v. North Dakota, a 1992 ruling that required a physical presence standard to collect sales tax. 

Here’s a link to a Journal of Accountancy article on the background and ramifications of the ruling.

This decision may create a chaotic environment for businesses of all sizes, which may motivate Congress to consider online sales tax legislation to create a Federal standard for collection, AICPA Executive Vice President – Advocacy Mark Peterson said at spring Council. This could provide a vehicle for the mobile workforce bill to move this year. AICPA’s Congressional Affairs Team is engaging with Congress on this possibility.>

A South Carolina Revenue and Fiscal Affairs Office study found online sales could generate $440 million annually in tax revenue.

As for how quickly South Carolina will move to collect online sales tax, the S.C. Department of Revenue said in a statement that it will “review the ruling before putting a formal collection process in place.”

“Large online retailers who enjoy the benefits and privileges of doing business in South Carolina should be required to pay the same sales tax that traditional South Carolina brick-and-mortar retailers currently pay,” DOR spokeswoman Bonnie Swingle said.