Leveling the Sales Tax Playing Field

In a 5-4 decision on June 21, 2018 the U.S. Supreme Court sided with South Dakota in a case called “South Dakota vs Wayfair“. What this now means is 45 states that have sales tax laws can now require online sellers, including sellers of flooring online,  that sell to residents within the state to collect and remit sales tax to the state even though they have no physical presence in the state.

Selling Flooring Online

How this will in the future effect selling flooring online remains to be seen. Most flooring ecommerce pay-per-click ads usually includes the words: “No Sales Tax“, which can be a big reason why someone buys their flooring from them. Brick-and-mortar flooring stores and many other flooring professionals have for a long time said this was unfair and gave the online sellers a big dollar advantage.

Many believe the recent Supreme Court sales tax ruling this has helped level the playing field. But it won’t mean the end of selling flooring online, or order online and pick up at a local location. It will be months before each state decides how to regulate sales tax for out of state sellers with no physical presence in the state. We also don’t know if Congress will act and create some new tax laws as well.

Many flooring manufacturers have tried to use Manufacturer’s Advertised Pricing (MAP) to help control online sellers from low balling their products to consumers, but most have done a really poor job of regulating the online flooring sellers. Will these manufacturers now relax their online pricing policies now that online sellers will have to collect sales tax? Time will tell how this will all shake out and how it effects online flooring sales. One thing is for certain, ecommerce is here to stay.

Author: John Simonson

John Simonson is the owner of Webstream Dynamics creating websites and digital marketing for the flooring industry for over 21 years. Prior to this John had been working in the flooring channel for over 25 years as a manufacturer's sales rep as well as managing a distributor location. Over the years he has conducted numerous seminars at flooring tradeshows and is a columnist for Floor Covering Weekly.

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