Shopify’s stock fell on Wednesday (June 27) following a recent U.S. Supreme Court ruling that will enable states to collect more online taxes.
According to Investor’s Business Daily, the Canada-based company’s shares closed down 6.6 percent to 144.70, falling below its 50-day moving average.
Last week, the U.S. Supreme Court ruled that states can collect taxes from online retailers.
The 5-4 decision essentially overturns the court’s 1992 ruling that states can collect sales taxes only from retailers that maintain a physical presence in those states. The 41 states that asked the Supreme Court to overturn that decision, Quill Corp. v. North Dakota, argued that it was “obsolete in an era of eCommerce."
“Quill creates rather than resolves market distortions,” Justice Anthony Kennedy wrote in the majority decision. “In effect, it is a judicially created tax shelter for businesses that limit their physical presence in a state but sell their goods and services to the state’s consumers, something that has become easier and more prevalent as technology has advanced. The rule also produces an incentive to avoid physical presence in multiple states, affecting development that might be efficient or desirable.”
In the meantime, Shopify is working to make its platform easier for its users. Earlier this week, the company announced that it had acquired mobile app Return Magic. Developed by a Montreal-based team co-founded by Guillaume Racine and Raff Paquin, Return Magic was launched in 2017 as a seamless returns solution that allows merchants to build loyalty while making shopping more convenient for consumers.
“Return Magic is a top-performing app in the Shopify App Store, and its acquisition is another step Shopify is taking to help our merchants own their time and spend it on what matters most: their customers,” Shopify said.
In addition, the company recently launched a new mobile app dubbed Shopify Ping. Through the app, merchants can manage tasks through messaging without needing to switch between apps and tools.