Businesses that sell products through online marketplaces, including Amazon, could soon be required to collect state sales taxes.

On Tuesday, the U.S. Supreme Court will hear arguments in South Dakota v. Wayfair Inc., a case that may overturn a 25-year-old precedent under which retailers aren't compelled to collect state taxes if they don't have a physical presence in the state, according to The Wall Street Journal. A decision in the case is expected by the end of June.

Experts expect the court to overturn the precedent, which was set at a time when people shopped out of state primarily through mail-order catalogs. Many brick-and-mortar retailers say the current rules make it difficult for them to compete with online businesses.

Third-party vendors could have collected between $3.9 billion and $6.2 billion in taxes on online marketplaces in 2017, according to the Government Accountability Office.

Published on: Apr 16, 2018