The Supreme Court has spoken, and e-tail has had to listen.
Following the June 21 U.S. Supreme Court decision on online sales tax, Blue Nile now collects sales tax in four more states than it did previously.
In a 5-4 ruling on South Dakota v. Wayfair, the court ruled that states could collect sales tax from “remote sellers” that do not have an in-state physical presence.
Prior to that ruling, Blue Nile only collected sales tax in Washington, where it’s headquartered, New York, and Virginia, where it has a webroom. Post Wayfair, America’s biggest jewelry site collects sales tax in those states plus Hawaii, Maine, Mississippi, and Oklahoma, according to its website.
Those four states have all passed economic nexus laws which require e-tailers to collect sales tax, provided they reach certain thresholds; for instance, Maine’s law only kicks in when a site does either $100,000 in business or 200 transactions in-state per year.
Blue Nile’s e-tail competitors do not seem to have changed their policies as noticeably—perhaps reflecting confusion in following the decision, or maybe the fact they do less business in certain states.
James Allen, generally considered the number two jewelry e-tailer, does not seem to have altered its policies at all. It currently collects sales tax in Maryland, where it’s based, New York, and Connecticut, just as it did prior to the ruling.
Brilliant Earth collects sales tax on orders shipped to California, where it’s headquartered, as well as Colorado, Illinois, Massachusetts, and Washington, D.C.—all jurisdictions where it has physical showrooms. The site now also warns that Pennsylvania and Oklahoma customers may have to self-report any taxes, and includes a notice that “U.S. sales tax requirements may be subject to change due to the recent Supreme Court ruling on sales tax.”
And it’s true: these policies are very much in flux. The Supreme Court ruling is barely a month old, and already some states are discussing new laws. Even some of the laws currently on the books don’t go into effect until later this year or next year. A full list of state nexus laws can be seen from on the Sales Tax Institute website.
Brilliant Earth did not return a request for comment. A Blue Nile spokesperson told JCK the site “compl[ies] with all tax requirements. We have always offered strong quality at exceptional value. This ruling does not change that position.” It adds that customers “shop online for many reasons including convenience, access to broad selection, quality, as well as strong value.”
A Signet spokesman said the company “has been a proponent of the Marketplace Fairness Act for years, collecting sales tax at both our store and branded e-commerce businesses accordingly. This ruling would expand sales tax collection to include all our online brands.”
Image courtesy of Blue Nile