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Online Taxes and Omnichannel: How New Tax Rulings Will Affect E-Commerce Sales

In the early ’90s, the Supreme Court passed on ruling whether states should be allowed to collect sales tax for online purchases. This was a reasonable decision. Access to the internet of sparse and major companies, such as AOL and CompuServe, had barely developed the concept of online shopping. By 2000, reports NetHistory.info, the growth of the internet had increased, and it had become an integral part of everyday life in today’s world. Now, the Supreme Court has once again weighed in on online sales tax collection, and Warehouse Managers need to understand what it means for e-commerce sales.

Recent Supreme Court Decisions Regarding Online Taxes and Omnichannel Supply Chains Have a Direct Bearing on E-Commerce Sales

As explained by USA Today, the recent ruling will allow states to begin collecting sales tax for online purchases. Although exceptions exist for small businesses, the specifications for such exceptions were not addressed. In other words, major companies that have already started collecting sales tax, like Amazon, are poised to continue uninterrupted sales. However, those that were still offering no-tax sales will take the biggest hit. It amounts to an increase in product pricing equivalent to the local and state sales tax laws.

The overturned precedent of the Supreme Court’s ruling on e-commerce sales tax may have another effect. It could result in additional closures of brick-and-mortar stores since companies no longer need them in areas to collect sales taxes.

Incorporated Payment, Billing, Shipping, and Warehouse Management Platforms Reduce Risk and Costs

Navigating the waters after this ruling will be most difficult for companies that have not yet started collecting taxes. A solution exists; these companies must begin to cut costs without sacrificing quality of service to overcome the immediate increase that consumers will see. This includes incorporating payment processing, billing, electronic data interchange (EDI), WMS, TMS, and other supply chain systems into a cohesive network. Essentially, this is about creating a management style that involves creating and collecting online taxes and omnichannel shopping experiences.

Top Tips to Maintain Strong E-Commerce Sales Throughout New Tax Rulings

The simplest way to address the pitfalls of the newfound tax rulings is to reduce costs and move toward omnichannel operations. As explained by TechTarget, Warehouse Managers should follow a few tips to make this possible:

  • Use multiple touchpoints to connect with consumers, such as mobile apps, social media, brick-and-mortar stores and websites.
  • Take advantage of third-party marketplaces, but do not neglect company-owned e-commerce resources.
  • Eliminate data silos. Siloed processes and data are the antagonists of a seamless, integrated experience.
  • Use technology and service providers, such as supply chain systems integrators, to streamline omnichannel implementation.
  • Move toward a just-in-time inventory management strategy.
  • Expand shipping options to include third-party logistics providers, multi-modal shipping, and consolidated freight management.

Position Your Organization to Meet Future Challenges in Tax Laws With Integrated Systems Now

The next challenge to the Supreme Court regarding issues that will affect supply chain management and warehouse management is on the horizon. Even if the existing suits have not been filed, warehouse managers must look toward the future with caution. Simple rulings can have big impacts for organizations that have not taken the steps necessary to prepare for such changes. Much like Amazon’s implementation of charging sales tax on orders prior to the recent Supreme Court decision, your organization must consider the future effects of new rulings. Fortunately, integrated warehouse systems can help. Choose Veridian for assistance in integrating your systems or selecting the right warehouse system for your organization.

Veridian, a Manhattan Associates, High Jump, and JDA warehouse management system implementation company, can help you realize your supply chain success. Fill out the contact information below in order to schedule a consultation call with one of our supply chain professionals.