The 5-4 decision defied the usual conservative-liberal lineup with Kennedy joined by liberal Justice Ruth Bader Ginsberg, and conservatives Samuel Alito, Neil Gorsuch and Clarence Thomas.
The Supreme Court on Thursday ruled that states can collect sales tax from all retailers, even if those retailers do not have a "physical presence" in their state - ultimately paving the way for states to collect sales tax from online retailers.
The court held that its prior "physical presence rule" was "unsound and incorrect" and so prior decisions from 1967 and 1992 were both overruled. Retailers including Apple, Macy's, Target and Walmart, which have brick-and-mortar stores nationwide, generally collect sales tax from their customers who buy online. That's because they typically have a physical store in whatever state the purchase is being shipped to. Amazon.com Inc. shares fell as much as 1.9 percent before paring losses. The law makes an exception for companies with less than $100,000 in annual sales or 200 transactions in the state, seeking to help smaller retailers compete with big e-commerce incumbents.
In 2015, Justice Kennedy suggested that it was time to reopen the case, and said that the "legal system should find an appropriate case for this court to re-examine [the issue]". Roberts wrote that Congress, not the court, should change the rules if necessary.
'You have to take the children away'
The president also accused illegal immigrants of endangering the lives of their children by sending them unaccompanied to the US. I think the answer to family separation is: "Don't separate families while you're enforcing the law", Cornyn told reporters.
How did the justices rule?
South Dakota was backed by President Donald Trump's administration in the case.
The bill, which was signed into law by Gov. John Bel Edwards, positions Louisiana to take advantage of the ruling and start requiring internet retailers to collect sales taxes. In doing so, the court reversed a 1992 ruling that allowed states to levy taxes only on those businesses with a brick-and-mortar location within the state. Marketplace sellers weren't previously required to automatically collect sales tax on their sales, and the ruling may hurt their sales.
In the original lawsuit, South Dakota sued three major online retailers: Wayfair, Overstock, and Newegg.
Amazon's stock is down almost a percent since the announcement, Etsy is down 3.12 percent. That will open the door to more states passing laws similar to South Dakota's.