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Supreme Court Says States Can Collect Taxes on Online Tire Sales

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The U.S. Supreme Court on June 21, 2018, ruled that states can collect sales tax on purchases of products made over the Internet. That includes online tire sales.

The Auto Care Association wasted no time applauding the decision.

"This is an important decision for many of Auto Care’s retail members, and we are pleased that the Supreme Court saw the unfairness in the current system and determined to make everyone play by the same rules," said Aaron Lowe, the association's senior vice president of regulatory and government affairs.

"We hope that implementation of the sales tax will be done uniformly across state lines to ensure a fair and efficient system of tax collection."

The Court's 5-4 decision means that online sellers will now be on a level playing field with brick and mortar retailers regarding charging sales tax. The Auto Care Association had filed an amicus brief with other retail groups urging the Supreme Court to hear the case based on the price advantage that the current system provided on-line sellers.

The decision overturns a previous Supreme Court decision that required companies to have a physical presence in the state where the purchaser resided in order to charge sales tax.

For more information on the topic, check out these links:

"Online Tire Sales: Mandatory Sales Tax Collection Would Even the Odds."

"Marketplace Fairness Act -- TIA Position Paper."

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