How MA Could Get $300M+ More In Taxes From You

Did you happen to catch the U.S. Supreme Court decision Thursday? In a case centered around Boston-based online retailer Wayfair, the decision essentially allows for states to collect tax from residents who make online purchases - regardless of where the retailer may be located.

The lawsuit was brought in South Dakota against Wayfair, Overstock, and Newegg - three large popular online retailers. The ruling overturned a 1992 ruling known as Quill the court said had become outdated because of technological advancements — namely the rise of e-commerce and everyone using their phone as a shopping cart. "North Dakota v. Quill" found that states could not mandate a business to pay sales tax unless the business had a physical presence in the state.

"This Court should not prevent States from collecting lawful taxes through a physical presence rule that can be satisfied only if there is an employee or building in the State," Justice Anthony Kennedy wrote in the opinion for the court. The vote was 5-4.

So the rough scorecard: Good for states and for brick-and-mortar retailers, bad for online shoppers and online retailers.

What does this mean for Massachusetts? It could unlock a sizable source of revenue just days after the state's highest court killed the so-called millionaire's tax.

The Boston Globe cited the Government Accountability Office's report that, as a result of Thursday's ruling, the state could gain as much as $279 million in tax revenue, and the Retailers Association of Massachusetts said that number could be more than $300 million. It's a ways away from the $2 billion or so the millionaire's tax was expected to have pulled in annually, but it's a start.

The case ruled was brought before the court in South Dakota, which enacted a law that required businesses to collect sales tax if the business delivered more than $100,000 of goods and services in the state or engaged in 200 or more separate transactions. The state sued Wayfair, Overstock, and Newegg, which met the criteria in the law but did not collect sales tax.

>>>Read more on this in the Boston Business Journal.

Feroze Dhanoa, Patch staff contributed to this report

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