Avalara looks to be a prime beneficiary of Thursday’s historic U.S. Supreme Court decision on e-commerce sales tax collection, as shares in the sales tax automation company spiked 30 percent immediately following the ruling before cooling off slightly.
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The ruling means that states can collect sales tax from online sellers even if those companies don’t have a physical presence in the state, settling a long dispute over the taxing authority of states in the internet age.
Seattle-based Avalara helps companies comply with sales tax laws throughout the U.S. and the world using automation software. Today’s decision introduced a new level of uncertainty in online retail, opening up the potential of 50 separate state laws concerning sales tax collection for e-commerce transactions.
Companies like Avalara could benefit from a series of new laws that introduce more regulations that online retailers are forced to comply with.
Avalara representatives could not talk about how the decision impacts its business due to the post IPO “quiet period” that the company says bars officials from talking about future effects on the business.
Avalara stock has been on fire since the company went public last week. It rose 87 percent on the first day of trading, and as of Thursday morning, it is up 116 percent over its IPO price of $24 per share.
