ICSC submits amicus brief on e-fairness

On November 2 ICSC submitted an amicus brief in collaboration with the Investment Program Association, Nareit, the National Association of REALTORS and The Real Estate Roundtable in support of a petition for certiorari to the U.S. Supreme Court in South Dakota v. Wayfair, et. al. The case is poised to directly challenge the Supreme Court’s pre-internet boom decision in Quill Corp. v. North Dakota, which ruled that out-of-state retailers cannot be required to collect state sales taxes unless they have a “physical presence” in the state. 

The summary of the arguments from the amicus brief states, “Quill’s distorting effects reach far beyond brick-and-mortar stores themselves and provide further reason for this Court to reevaluate Quill. First, the loss of brick-and-mortar stores, many of which are integral to the social fabric of their communities, increases unemployment and creates a sense of dislocation among community residents...the lost revenue from sales, property, and income taxes threatens the ability of state and local governments to provide much-needed public services, including those that benefit online retailers.”

ICSC President & CEO Tom McGee made the following statement regarding the amicus brief: “The current flawed sales tax system gives as much as a 10 percent price advantage for online retailers over brick-and-mortar competitors, causing considerable harm to local retailers in communities in South Dakota and across the country. States lose $26 billion annually through the current online sales tax loophole created by the 1992 Supreme Court decision in Quill and the inaction by Congress to fix the problem. This lost revenue causes financial hardship that impacts state and local communities requiring them to find other methods to fund everything from education to law enforcement to healthcare or, even, cutback on serving the public. ICSC along with other leading organizations urge the Supreme Court to revisit that decision to help lift the economic burden on local communities. It’s time to level the playing field for online and brick and mortar retailers. Fair competition across all retailers will benefit consumers in many different ways as well as support jobs, economic growth, state and local public services, community development and innovation.” 

In addition to the amicus brief from the real estate groups described above, several other groups submitted amicus including a group of 36 Attorneys General from across the country, the National Retail Federation, the Retail Litigation Center and the House and Senate legislative sponsors who continue to be frustrated by the lack of Congressional action on this issue. 

On a state level, ICSC Texas Government Relations Co-Chairs Kim Carmack and Tracy Bratton submitted a letter on November 2 to the state’s House Ways and Means Committee regarding loss of revenue to the state and voicing support for the measure. 

“Earlier this year, ICSC joined with the National Conference of State Legislatures to update sales tax revenue loss estimates with 2015 Census data,” the letter states. “That update found $26 billion in sales tax revenue is lost annually to the states from remote sales. Further analysis shows that Texas will lose more than $21 billion from 2018-2022.”

The Supreme Court is expected to decide in early 2018 whether they will accept the South Dakota case.