Supreme Court to rule on whether or not e-tailers pay sales tax

The Supreme Court of the United States has decided to take up a very controversial topic: whether or not online sellers would be required to collect sales tax in the same way brick-and-mortar stores do. The Court has urged Congress to take up this issue through legislative efforts.

In October 2017, South Dakota attorney general Marty Jackley asked the court to review the South Dakota v. Wayfair, Overstock and Newegg decision. The State is asking the U.S. Supreme Court to overrule Quill Corp. v. North Dakota's decision which involved a physical-presence requirement which currently prevents the State from requiring out-of-state retailers to remit taxes for sales made within South Dakota.

South Dakota wants Quill Corp v. North Dakota decision overturned

In a statement, Matthew Shay, head of the National Retail Federation, said, "Congress should not sit on the sidelines as the Supreme Court considers this case. It’s time to pass legislation to settle this critical issue once and for all. Even if the court rules in favor of a modern sales tax policy, legislation will still be needed to spell out how that would work."

This would be a big win for brick-and-mortar stores, who for years have argued that the Quill decision gave an unfair advantage to online e-tailers. Back in 1992 when the Quill decision was handed down, the internet was still in its infant stages, and merchants and consumers had not foreseen the e-commerce and omnichannel world we live in today. In today's world of online only merchants like Amazon, many, like Jackley, believe it is time to modernize our tax code.

Lobbyists have been pushing Congress to do something about this for decades believing the advantage e-commerce only companies got was unfair.

This case stems from a state law passed in 2016 that would require out-of-state retailers to collect and remit the sales tax similar to in-state retailers. The law applies to out-of-state retailers if they have more than 100,000 dollars in sales or complete more than 200 sales transactions per year within South Dakota.





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