Supreme Court Confirms Online Wine Tax

Jun 27, 2018

(Wine Searcher) -  legal tax loophole on out-of-state wine purchases has been closed, Liza B. Zimmerman reports.

Wine sales have been somewhat of a laissez-faire business in the US for some decades – some retailers charged taxes on out-of-state purchases while others elected not to do so. As a result, the same bottle of wine might cost a New York consumer less online in New Jersey than at the shop down the street.

However all of that has changed as last week with the Supreme Court case of South Dakota v Wayfair Inc. In keeping with the justices' ruling, the wine retail market is going to be revamped and standardized in terms of taxes across the country. This telling case – which comes just nine months on the heels of wholesaler pressure pushing UPS and FedEx wine deliveries out of 36 states – will mandate a retail market in which taxes will be paid by retailers large and small.

Most major internet wine sales entities, such as Amazon and Wine.com, have been charging their out-of-state customers taxes all along. Until six months ago, Amazon didn't charge sales tax on sales in areas where it didn't have a brick-and-mortar presence, says Eric F. Citron, counsel of record for South Dakota in the recent Supreme Court case and a partner in the Maryland law firm Goldstein & Russell, P.C. They changed that policy six months ago, he notes. Amazon did not respond in time to comment for this story.


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