The U.S. Supreme Court has agreed to hear South Dakota v. Wayfair, et al, a landmark court case regarding the collection of state sales tax. The plaintiff is challenging the existing requirement that only retailers with a physical presence in a state — in the form of stores or warehouses — can be required to pay state sales taxes, as upheld in the previous Supreme Court ruling, in Quill Corp. v. North Dakota, in 1992.
A total of 36 states and the District of Columbia had asked the high court to take up the issue. In a brief filed with the court, the states wrote: “As the volume of Internet-based retail transactions continues to compound daily, the physical-presence rule exacts an ever-increasing toll on the States’ fiscal health.”
ICSC, which leads the Marketplace Fairness Coalition, has lobbied for e-fairness for more than 25 years and submitted an amicus brief to the court in November.
“The Supreme Court’s decision today is an important and necessary step forward toward updating the law on remote sales and tax collection so that it reflects the realities of today’s marketplace,” said Tom McGee, president and CEO of ICSC. “The distorting effects of Quill Corp. v. North Dakota have had a far-reaching impact beyond brick-and-mortar stores. While the retail sector continues to innovate, the existing laws are decades behind. The current, outdated system places millions of American jobs at risk, because the government is picking winners and losers.
“It’s time to level the playing field for online and brick-and-mortar retailers. A sale is a sale regardless of whether it takes place on Main Street or on the Internet. The same rules that apply to local businesses across our nation should apply to online-only retailers. Communities across the country rely on sales-tax revenue to provide fundamental services, including police and firefighters. We hope this decision represents a step forward that brings parity to sales-tax collection.”
The court is expected to hear arguments in April and to rule on the issue at the end of its nine-month term in late June.
Stephanie Lockwood
Senior Director, Government Relations & Advocacy
