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   Retailers Say South Dakota Ruling Means Congress Needs To Act Now To Require Online Sales Tax Collection
by National Retail Federation
Posted: Monday, September 18, 2017 at 3:26PM EDT

WASHINGTON - The National Retail Federation said a ruling issued today by the South Dakota Supreme Court sets the stage for the U.S. Supreme Court to revisit a long-out-of-date ruling on ecommerce. But NRF called on Congress to quickly pass legislation allowing states to require online sellers to collect sales tax the same as local stores rather than continuing to leave the issue in the hands of the courts.

“It’s time for Congress to pass a law that recognizes the evolution in the retail industry over the past two-and-half decades and say that online sellers should no longer be given an unfair advantage over Main Street merchants,” NRF Senior Vice President for Government Relations David French said. “The state of South Dakota is not going to stand for this loss. They are going to push their case, and that means it is very likely that there will be a new ruling on this issue by the U.S. Supreme Court. We are more than happy to see the Supreme Court revisit this issue, but we view a carefully crafted stakeholder-led decision in Congress as far preferable to a judicial decision that reverses the previous ruling without addressing the details of implementation.”

The South Dakota Supreme Court today ruled against a 2016 state law requiring online merchants with more than $100,000 in sales or 200 transactions with state residents to collect sales tax. The court said the state cannot require out-of-state sellers to collect sales tax.

The ruling is in line with the U.S. Supreme Court’s 1992 Quill decision, which held that online sellers can only be required to collect sales tax in states where they have a physical presence such as a store, office or warehouse.

French called on Congress to pass the Remote Transactions Parity Act, a bill pending in the House that would allow states to require out-of-state sellers to collect sales tax regardless of whether they have a presence in the customer’s state. The legislation also provides protection for small businesses from any potential compliance burden.

The South Dakota ruling comes two years after Justice Anthony Kennedy said that the U.S. Supreme Court made a mistake in Quill by relying on an outdated precedent on physical presence. Kennedy invited opponents of the decision to bring a new case that would allow the court to correct its mistake.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy.

Source: National Retail Federation 

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