Online retailers took a hit and big brick-and-mortar chains saw a boost Thursday after the Supreme Court ruled that states could require tax collections on Internet sales.
The 5-4 decision in South Dakota v. Wayfair Inc. means that states can now force retailers to collect sales taxes even if they don’t have a physical presence in the state. Big retailers had argued that such a ruling was needed to compete with online retailers whose customers could skirt the taxes.
Wayfair, the Internet home goods seller named in the case, saw its stock plunge nearly 9 percent after the decision was announced Thursday morning. It subsequently pared some of those losses. Other online sellers such as Overstock also suffered losses, as did eBay and Etsy — two platforms on which sellers will now be exposed to new tax requirements.
Meanwhile, Walmart’s stock jumped more than 1 percent, and other big box stores such as Target and the Home Depot also got a lift.
The Retail Industry Leaders Association, a group that represented those and other retailers in the case, celebrated the ruling.
“Today’s decision culminates years of tireless work by the retail community to reverse a pre-Internet era rule that distorts free markets and puts local brick and mortar stores at a competitive disadvantage with their online-only counterparts,” said Deborah White, the group’s general counsel. “This was the right case and the right time for the court to act, and we couldn’t be more pleased with the outcome.”
