The Supreme Court’s ruling that gives states more power to collect sales tax from online transactions will hurt eBay’s business, according to SunTrust Robinson Humphrey.

The firm lowered its rating to hold from buy for eBay shares, predicting the additional tax compliance requirements will drive sellers away from the online auction platform.

Last month the U.S. Supreme Court ruled that states have the right to collect taxes on ecommerce sales whether or not the retailer has a physical presence in the state.

“We’re downgrading EBAY… to reflect anticipated headwinds from on-going changes to tax laws in the US following SCOTUS’ decision to reverse a 1992 ecommerce precedent, and prospects for similar headwinds overseas,” analyst Youssef Squali said in a note to clients Tuesday. “While this is not a call on 2Q18 results, we believe these changes increase the likelihood of a slowdown in GMV growth in FY19 and beyond, reversing recent improvements in this metric and Street expectations for more.”

EBay shares are down 1.7 percent Tuesday after the report.

Squali reduced his price target to $40 from $48 for eBay shares. The new target is 5.5 percent higher than Monday’s closing price.

The analyst said new tax laws will force eBay to reports sales transactions to the IRS. He believes the “majority” of sellers on the platform do not collect taxes.

“Logistically, we believe this is a daunting task for eBay as sellers would need to provide eBay with a social security or federal tax ID number, and report their profits to the IRS,” he said. “This paperwork requirement is likely to add substantial friction into the system, potentially driving many sellers away from the eBay platform.”

The company did not immediately respond to a request for comment.