The decision allows state and local governments now to press online retailers to collect sales tax revenues – which some experts believe could bring in billions of dollars in additional revenues, which would be collected if the online seller had a ‘physical presence’ – a store – in that state. The decision means states are free to collect billions of dollars in extra revenue from online retailers, at a time when many state officials complain it's difficult to balance their budgets, and that many consumers may pay more for online purchases. At the time of those rulings, the Supreme Court "did not have before it the present realities of the interstate marketplace, where the Internet's prevalence and power have changed the dynamics of the national economy." But Kennedy’s decision also praised the South Dakota law — which, for instance, does not allow the state to retroactively collect sales taxes — for offering a “reasonable degree of protection” to companies, and some retail advocates suggested that states would take a moderate approach with their new powers. The ruling overturned previous Supreme Court precedents from the 1992 Quill case, which had theoretically made internet sales a tax-free zone in certain situations; over the years, that changed, but this ruling will now require online sellers to collect sales taxes for all states. Many of the largest online retailers, such as Amazon, already pay sales taxes because they have enough of a physical presence in most states through their network of warehouses and distribution facilities to qualify as taxable by states.
The United States Supreme Court allows states to collect sales taxes from online retailers that do not have a "physical presence" in that state.