Shopify Stock Is Way Out Of Style

(RTTNews) - Shares of e-commerce platform provider Shopify has slumped following a recent U.S. Supreme Court ruling that allows states to collect more online taxes.

On June 21, the U.S. supreme court ruled that states can collect taxes from online retailers. The 5-4 decision essentially overturns a 1992 ruling, Quill Corp. v. North Dakota, which ruled that states can collect sales taxes only from retailers that maintain a physical presence in those states.

However, 41 states asked the Supreme Court to overturn that decision as that ruling has become obsolete in an era of e-commerce.

"Quill creates rather than resolves market distortions. 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," Justice Anthony Kennedy said.

Shopify is currently trading at $143.36, down $1.34 or 0.93%, on the NYSE. On June 21, Shopify stock opened trading at $173.48.