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Supreme Court To Take Up Online Sales Tax

Supreme Court To Take Up Online Sales Tax

Now, a South Dakota case will allow the Court to take another look. "They would not have ruled that forcing out of state sellers to collect sales tax is a burden, because the technology exists today, where it is no longer a burden".

That would be, but a defeat for smaller online retailers who claim they can not navigate dozens of state sales tax systems the way major players such as Amazon do.

For almost a decade, retailers and trade organizations including the NRF and the Retail Industry Leaders Association, have lobbied Congress to pass legislation to end competitive advantages that the ruling inadvertently extended to e-commerce players.

The Supreme Court has agreed to revisit a 26-year-old decision that prevented states from requiring many online retailers to collect sales tax.

The state said the growth of e-commerce in the past 25 years has "imploded" the legal rationale used in the 1992 case, known as Quill v.

"This court must take account of how its own, outdated precedent has played a part in that development, pushing economic activity (and important entry-level jobs) from Main Street to distant tech companies, with a tangible effect on everyday American life".

The Supreme Court may be on the verge of tidying up an issue that has vexed states since the beginning of online sales-the attempt to collect tax on the sales by remote sellers into their states.

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But Sen. Jeanne Shaheen, D-N.H., who has fought legislation to require online sales taxes, said a reversal "would be especially damaging to New Hampshire, where our small businesses have no experience collecting sales taxes and should not be forced to become tax collectors for other states".

The case, in which South Dakota sued home furnishings powerhouses Wayfair (NYSE: W) and Overstock.com (NYSE: OSTK), and electronics and appliance retailer Newegg, is the latest twist in a almost three-decade battle pitting brick-and-mortar retailers against e-commerce players as they battle over sales tax collection.

Noem was among a bipartisan group of senators and House members who filed a friend-of-the-court brief with the high court urging it to consider the South Dakota case.

Justice Neil Gorsuch also voiced skepticism about the 1992 decision when he was an appeals court judge, describing it as having created "a sort of judicially sponsored tax shelter". "Moreover, the integration of tax collection software is extraordinarily expensive". The justices said then that requiring companies to do more would amount to discrimination against interstate commerce. "As a final alternative, the court could say the legislation is bad because it's up to Congress to decide the question".

The issue of internet sales taxes has vexed lawmakers for almost two decades. The organizations said the decision negatively affects brick-and-mortar businesses by putting them at a competitive disadvantage.

"This is about 2% to 4% of total 2016 state and local government general sales and gross receipts tax revenues", GAO said.