Siding with states and traditional retailers on a 5-4 vote, the court overturned a 1992 ruling that had made much of the internet a tax-free zone. That decision had shielded retailers from tax-collection duties if they didn’t have a physical presence in a state.

Writing for the court, Justice Anthony Kennedy said the 1992 ruling, which involved catalogue sales, was “unsound” and obsolete in the e-commerce era.

Broader taxing power will let state and local governments collect an extra $8 billion to $23 billion a year, according to various estimates. All but five states impose sales taxes.

Wayfair Inc. plunged as much as 9.5% on the news, and was down 7.5% to $107.45 at 10:20 a.m. in New York trading. Amazon.com Inc. dropped as much as 1.7% to $1,720.77; EBay Inc. dropped as much as 1.5% and Etsy Inc. fell as much as 4%.

The ruling will put new pressure on those companies and other internet retailers and marketplaces that don’t always collect taxes — including Overstock.com Inc., Newegg Inc. and thousands of smaller merchants. Overstock.com lost as much as 3.5%; while 1-800 Flowers.com Inc. dropped as much as 1.1% and online educational service Chegg Inc. dropped as much as 7.8%.

It will also affect Amazon, though the biggest online retailer wasn’t involved in the case. Amazon charges consumers in states that impose a sales tax, but only when selling products from its own inventory. About half its sales involve goods owned by third-party merchants, many of which don’t collect tax.

The court upheld a South Dakota law that requires retailers with more than $100,000 in sales or 200 transactions annually in the state to pay a 4.5% tax on purchases.