The U.S. Supreme Court made a major ruling in favor of veterinarians and other brick-and-mortar businesses last month, allowing states to require online retailers to collect sales tax. A 1992 Supreme Court ruling does not require online retailers to collect sales tax unless they have a physical presence in-state, giving them an unintended tax loophole and providing an unfair tax advantage of up to 10 percent over brick-and-mortar operations. Many veterinary practices offer a range of products to clients; however, veterinarians, like other small, local business owners, must collect sales tax on those products. Last month’s ruling, issued in the case of South Dakota v. Wayfair, is a first step in ending that disadvantage. The ruling allows—but does not require—states to begin having online retailers collect and remit sales tax in the same way that brick-and-mortar businesses already do. The AVMA asked the court to take this position in legal briefs filed twice in the past year. Laws will still vary by state, and Congressional action is likely needed to set a tax collection framework.
