The new decision made with the South Dakota v. Wayfair case has potential big implication for tobacco businesses as well. There are many e-commerce retailers selling tobacco products that, like many other online retailers, have not been required to collect sales tax in those states where they didn’t have a physical presence. This was often a complaint for many brick-and-mortar retailers who couldn’t compete on prices and the tax break consumers were receiving from shopping online. With the South Dakota v. Wayfair decision, however, brick-and-mortar see a glimmer of hope in now being able to better compete and offer consumers a fuller experience that online merchants are unable to. For tobacco retailers, it’s important to note that the case applies only to sales tax and does not currently include OTP or other excise taxes.
In a press release, Scott Pearce, executive director of the International Premium Cigar & Pipe Retailers Association (IPCPR), commented: “Today’s developments help bring equity to the retail space. IPCPR supports at development that supports and benefits our brick and mortar tobacconists.”
It’s important to note that it will take some time for the effects of this new decision to fully roll out into the marketplace. States are now expected to begin to pass new legislation and regulatory plans to help them collect sales tax on out-of-state sales.
You can read the full text of the South Dakota v. Wayfair decision by clicking here.
