Supreme Court rules cellphone-tracking records off-limits without a warrant

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The case originated from a lawsuit that the state of South Dakota had filed against four online retailers, including the online furniture retailer Wayfair.

The matter reached the Supreme Court after South Dakota in 2016 passed a law requiring out-of-state sellers to collect and remit sales taxes, provided the total sales exceeded $100,000 or at least 200 transactions.

Before this ruling, online retailers had to have a physical presence in a state to be subjected to that state's sales tax.

Thanks to a 1967 Supreme Court ruling, states have only been allowed to collect sales tax on a purchase made when the retailer has a physical presence within that state.

States can now force online shoppers to pay state sales tax.

Shares in the online marketplace Etsy fell more than 2% after the decision.

The ruling puts an end to a legal regime that "distorts free markets and puts local brick and mortar stores at a competitive disadvantage with their online-only counterparts", said Deborah White, general counsel of the Retail Industry Leaders' Association.

This led to an interesting scenario a few months ago when Connecticut's Department of Revenue Services (DRS) sent some Newegg customers an unexpected tax bill.

The Supreme Court ruled 5-4 in favor of South Dakota. Lawmakers in the state, which has no income tax, passed a law created to directly challenge the physical presence rule. The exception is when buying from a third-party seller that sells goods on Amazon.

"We're reviewing the decision", was all agency rep James Gazzale said in an emailed statement. Customers were generally supposed to pay the tax to the state themselves if they don't get charged it, but the vast majority didn't. In 2014, Amazon, the largest online retailer, began collecting the tax in Florida after it opened a series of "fulfillment centers" in the state.

Only five states do not have a state-wide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.

Justice Anthony Kennedy wrote - in an opinion joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch - that the previous decisions were flawed. Chief Justice John Roberts wrote a dissenting opinion. On Twitter, President Donald Trump called the decision a "Big victory for fairness and for our country".

With this ruling look for more states and local governments to push for taxes on online physical and digital sales. They argue tax-collection software makes it easier for retailers big and small to comply with their tax obligations, which vary widely from state to state, and product to product. "A lot of the companies that haven't been paying sales tax are going to have to start paying". First, the Act applies a safe harbor to those who transact only limited business in South Dakota.

Roberts said he agreed that a 51-year-old case partly affirmed by Quill was wrongly decided, but he opposes discarding the physical presence rule because the internet economy has grown in reliance on it.

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