Supreme Court To Hear Case On States Collecting Taxes From Online Sales

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South Dakota and many states around the country want online retailers to collect state sales taxes. Next month the Supreme Court will hear a case that would decide if they will.

The state of South Dakota says it’s unfair online retailers don’t have to collect the same sales taxes main street stores have to.

Online retailers argue it’s discrimination to force them to collect those taxes.

“It would be like expecting a South Dakota person who goes into North Dakota, that North Dakota store to collect, remit, all the sales taxes back to south Dakota,” Netchoice VP & General Counsel Carl Szabo said.

“In that example, that North Dakota Business would already be collecting North Dakota taxes.  So, we just want it to be fair,” South Dakota Attorney General Marty Jackley said.

In a previous case – Quill v. North Dakota the Supreme Court ruled states can’t force retailers to collect sales taxes if the retailer doesn’t have a physical presence in the state. South Dakota wants the supreme court to overturn the quill decision. Marty Jackley says a lot has changed since the 1992 ruling.

“The internet didn’t exist as it does today, so those Justices would not have been able to consider what eCommerce has done, what technology has done,” Jackley said.

Carl Szabo says overturning the quill decision would have serious consequences for online and main street retailers.

“A small to midsize main street store decides to go online and overnight has to immediately figure out and comply with twelve thousand different tax jurisdictions and subject themselves to and subject themselves to 46 different state audits,” Szabo said.

The White House weighed on Wednesday.

“The President has said many time before he’s always looking to create a level playing field for all businesses,” Sarah Sanders said.

Jackley says the solicitor general plans sit with South Dakota when it argues the case in the Supreme Court.

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