The ruling threatens to add to the costs of online retailers which have previously been protected from paying tax if they had “no physical presence” in the state.
Traditional retailers have said they face an uneven playing field in the battle against online-only competitors who face much lower taxes on premises and sales.
Amazon has come under particular pressure for the methods it uses to ensure it pays a low tax rate. The new ruling is likely to go some way to redressing the balance as state legislatures.
Investors interpreted the decision as doing little to dent Amazon’s profits however. The companies shares slipped momentarily by 0.9 per cent before quickly regaining lost ground, trading just 0.5 per cent down shortly afterwards.
So valuable is the company that even that movement knocked about $4bn off its market capitalisation.
The Supreme Court revived a 2016 South Dakota law that required larger out-of-state e-commerce companies to collect sales tax, a mandate that the online retailers fought in court.
South Dakota estimated that it could collect an extra $34 bn per year in revenue if allowed to tax internet sales, however the General Accounting Office put the figure closer to $13bn.
Josh Silverman, chief executive of Etsy said: “While today’s decision is not the one for which we advocated, the Supreme Court did acknowledge the important difference between big internet retailers and the creative entrepreneurs on our platform.
"This opens the door for Congress to act and create a simple, fair federal solution for microbusinesses."
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