Washington, D.C., September 14 – This afternoon, Reps. Reps. Sensenbrenner, Eshoo, Duncan, and Lofgren introduced the Online Sales Simplicity and Small Business Relief Act of 2018. This legislation is a response to the chaos caused by the June-2018 Supreme Court decision in South Dakota v. Wayfair.

The Court overturned decades of legal precedent and put small business owners at the mercy of all out-of-state sales tax collectors, covering more than 12,000 local tax jurisdictions.

Below, please find a statement from Steve DelBianco of NetChoice regarding the introduction of HR 6824 this afternoon:

“The U.S. Congress has the Constitutional role of protecting interstate commerce.  Reps. Sensenbrenner, Eshoo, Duncan, and Lofgren are to be commended for stepping into the breach created when the U.S. Supreme Court erased 60 years of settled law that restrained state tax collectors from reaching across their borders.

America’s small businesses cannot survive under the complex burdens and audit risks from 46 different state sales tax regimes. HR 6824 incentivizes all states to significantly simplify their sales tax systems.”

NetChoice to Congress: Protect Interstate Commerce

Without the physical presence rule, American businesses and consumers are put at risk by state-based internet taxes

Washington, D.C., July 23, 2018 – Tomorrow, the House Judiciary Committee will hold a hearing entitled “Examining the Wayfair decision and its Ramifications for Consumers and Small Businesses”. The hearing is the first step for Congress to prevent damage being done by last month’s Supreme Court decision in South Dakota v. Wayfair.

“Because of Wayfair, businesses have no clear test to determine whether they are obligated to pay a foreign state’s sales tax,” said Steve DelBianco, president of NetChoice. “Sellers are left with a dilemma to either collect tax that they may not owe at significant expense, or risk later being held responsible for uncollected taxes plus interest and penalties.”

“The Commerce Clause is just as necessary now as when the constitution was written, and Congress must protect interstate commerce in the digital age,” continued DelBianco. “The time to act is now, and the longer Congress leaves the state tax playpen unsupervised, the worse the mess will be for American small businesses and consumers.”

“The court misunderstood the true audit liability faced by America’s small businesses and there’s no guarantee that tax software services will be paid for by the states.”

NetChoice has supplied a written statement for the record available here.


Ruling in Favor of South Dakota Will Cause Chaos Nationally If Congress Does Not Act

WASHINGTON, DC, June 21, 2018 – The U.S. Supreme Court today upended decades of precedent to deliver a ruling in favor of South Dakota that will burden small catalog and web retailers and harm the consumers who rely on them.  The decision in South Dakota v. Wayfair will unleash a summer of chaos as small businesses struggle to comply with the conflicting tax rules of more than 12,000 local tax jurisdictions across 46 states.

“Small web businesses will be hardest hit,” said Chris Cox, NetChoice outside counsel, “particularly those with only a single location, because they can’t afford the overhead to comply with thousands of different tax rules across the country.  Consumers will quickly feel the negative effects as those businesses dry up or are forced into the arms of Internet giants.”

Cox, a former Congressman who authored the Internet Tax Freedom Act, believes the Court disregarded the clear intent of Congress in that law. “The last hope for consumers and small online business owners is for Congress to take action.  It should be Congress, not the courts, that sets the rules for interstate sales tax collection,” he added.

“While a fraction of online commerce was free of sales tax before this ruling, the Supreme Court has now created an even greater imbalance by placing far greater burdens on Internet shopping compared to its “offline” counterparts,” said Steve DelBianco, President and CEO of NetChoice. “A brick-and-mortar business won’t have to comply with the differing rules of over 12,000 tax jurisdictions, or integrate costly and complex tax software into its operations.  But small web businesses will, eating away at their already razor-thin profit margins.  When these businesses disappear, consumers will be the biggest losers.”

“The court has legislated from the bench,” continued DelBianco, “but it lacks the tools Congress has to protect interstate commerce and reduce regulatory complexity.  Congress should immediately address this situation by delivering a law that harmonizes the interests of consumers, small businesses, and state governments.”

Iowa Legislature Should Reject New Taxes in SF 2417 and HF 2489, NetChoice Testifies

WASHINGTON, DC, May 4, 2018 — NetChoice filed testimony this week in the Iowa State House and Senate chambers asking for a full rejection of unconstitutional provisions in SF2417 and HF2489. If enacted, the bills would impose new taxes on Iowans while also harming Iowa’s travel and technology sectors.

“Iowans will likely see this legislation as a tax increase,” said Steve DelBianco, President of NetChoice. “This bill attacks Iowa’s tech sector and travel agents, and its taxes will be passed on to Iowa residents. Legislators should not pass a bill that will come back to haunt them.”

The bills would force out-of-state online marketplaces to collect sales tax from Iowans – a move that breaks with U.S. Supreme Court precedent. It also suffers from questionable timing as the legality of out-of-state tax collection requirements are currently being reviewed again by the U.S. Supreme Court.

A U.S. Supreme Court decision on South Dakota v. Wayfair is expected this summer and will determine if Iowa can tax beyond its borders.  If the U.S. Supreme Court upholds the 60 years of jurisprudence, much of SF2417 and HF2489 will be illegal.

“If this bill is passed, it could be nullified by the U.S. Supreme Court next month in its decision on South Dakota v. Wayfair,” continued DelBianco. “Regardless of the decision, this bill would be a loss for Iowa residents.”

NetChoice Reaction to South Dakota v. Wayfair Oral Arguments

Steve DelBianco, NetChoice President, attended today’s oral argument before the Supreme Court in the case of South Dakota v. Wayfair.

NetChoice filed an amicus brief in the case, explaining that Congress has spoken on the online sales tax issue by enacting the Internet Tax Freedom Act (ITFA) in 1998, and by making ITFA permanent in 2016.   ITFA prohibits discriminatory sales tax burdens on e-ecommerce, which is precisely what would happen if the court overturns Quill. Instead of ruling now, the court could remand the case to South Dakota to analyze conflict with ITFA.

With respect to questions and arguments in today’s supreme court session:

“Tough questions asked by the Justices today reveal that the court understands this is far more complicated than South Dakota has claimed,” said DelBianco. “Overturning Quill isn’t just flipping off a switch. It would cause national chaos.”

DelBianco summarized the strongest questions by the court. They are followed below by exact quotes from justices:

  • “If we overturn Quill, isn’t it a problem that other states may apply their sales retroactively?”
  • “What’s the threshold for minimum contacts that trigger state tax obligations?”
  • “What happens when the software breaks down?”
  • “What are the costs for smaller businesses to collect for 46 states?”
  • “If we overturn Quill, won’t we just help the biggest online sellers at the expense of small businesses?”
  • “With nearly all the big ecommerce sellers already collecting, hasn’t this problem peaked, and why act now?”
  • “Isn’t this the role of Congress? And if congress has not acted, doesn’t that suggest they are okay with Quill?”
  • “Should we ignore Supreme Court precedent?”

If we overturn Quill, isn’t it a problem that other states may apply their sales retroactively?

JUSTICE ALITO: [D]oes the government have a position on the question whether retroactive application of — of this would be constitutional?

  1. STEWART: In our view, it would be constitutional

What’s the threshold for minimum contacts that trigger state tax obligations? 

CHIEF JUSTICE ROBERTS: Mr. Stewart, do you believe that there is a constitutional minimum [number of sales for physical presence]?

  1. STEWART: there’s no constitutional minimum

What happens when the software breaks down?

SOTOMAYOR: What happens when the tax program breaks down, as it already has for the states who are using it, and merchants can’t keep track of who they’ve sold to?

What are the costs for smaller businesses to collect for 46 states?

SOTOMAYOR: Actually, [small businesses are] put at disadvantage not by Quill but by the fact that there are massive discount sellers, not just on the Internet, but even in stores now.

SOTOMAYOR: So what are we going to do with the costs that you’re going to put on small businesses?

If we overturn Quill, won’t we just help the biggest online sellers at the expense of small businesses?

BREYER: [T]heir side puts up a certain specter which I’m sensitive to, which is that we have four or maybe five giant potential retailers in the country; I mean, there could be a very small number selling virtually anything.

And they sell over the Internet. And the hope of preventing oligopoly, et cetera, is small business, which finds it easy to enter.

Now you raise with this entry barriers, and they say a lot and you say a little. And I don’t know if it’s a little or if it’s a lot.

And if it is a lot, there might be ways of putting minimums in that would, in fact, preserve the possibility of competition and the possibility of new entry, stopping the entry barriers from raising too high.

With nearly all the big ecommerce sellers already collecting, hasn’t this problem peaked, and why act now?

CHIEF JUSTICE ROBERTS: the suggestion in some of the briefs is that this is a problem that has peaked in the sense that the — the bigger e-commerce companies find themselves with physical presence in — in all 50 states.

If it is, in fact, a problem that is diminishing rather than expanding, why doesn’t that suggest that there are greater significance to the arguments that we should leave Quill in place?

Isn’t this the role of Congress?  And if congress has not acted, doesn’t that suggest they are okay with Quill?

BREYER: Well, we have briefs from three Senators and Congressman Goodlatte that says Congress was about to act. And, indeed, what stopped them from acting was our decision to decide this case. Now that’s — that’s their view of it. And between whether they know or whether I know, I guess they have a better view. They’re members of Congress and they point to many statutes. And you are 50 states. If you do not have the power to get Congress to do something, I don’t know who would.

ALITO:  [I]f Quill is overruled, what incentives do the states have to ask for any kind of congressional legislation?

CHIEF JUSTICE ROBERTS: [M]aybe [Congress] already have and they’ve made a decision or at least majorities have made a decision that this is something they’re going to leave the way it has been for, whatever it is, 25 years.

KAGAN: [U]sually, when somebody says something like that, that Congress has not addressed an issue for 25-plus years, you know, it — it gives us reason to pause, because Congress could have addressed the issue and Congress chose not to.  This is a very prominent issue which Congress has been aware of for a very long time and has chosen not to do something about that. And that seems to make the — your bar higher to surmount, isn’t it?

JUSTICE KAGAN: But isn’t that essentially a reason why we should leave this to Congress? In other words, from this Court’s perspective, the choice is just binary.

It’s — it’s you either have the Quill rule or you don’t. But Congress is capable of crafting compromises and trying to figure out how to balance the wide range of interests involved here.

Now the General said Congress hasn’t done that, but, again, you know, Congress can decide when it wants to craft a compromise and when it doesn’t want to craft a compromise. And then Congress, if it decides it wants to craft a compromise, can craft a compromise in ways that we cannot.

Should we ignore Supreme Court precedent?

GINSBURG:  Quill, right or wrong, was this Court’s decision. And if time has, and changing conditions, have rendered it obsolete, why should the Court which created the doctrine say: Well, we’ll — we’ll let Congress fix up what turns out to be our obsolete precedent?

NetChoice Calls on U.S. Supreme Court to Uphold Current Internet Sales Tax Laws

Washington, DC, April 17, 2018 – Earlier today, the United States Supreme Court heard oral arguments in the case of South Dakota v. Wayfair,  At issue is the legality of a new South Dakota sales tax law that imposes sales tax burdens on out-of-state businesses with no physical presence in the state.

The South Dakota law breaks with Supreme Court precedent set in the 1992 case of Quill vs. North Dakota and violates the Internet Tax Freedom Act (ITFA) enacted by Congress in 1998. These protections shelter small businesses from the demands of 46 state tax auditors covering 12,000 local tax jurisdictions.

Below, please find reactions to today’s oral arguments from NetChoice and several other eCommerce and online sales tax experts.


The Wrong Fight for Trump

NetChoice President Steve DelBianco

“The Trump administration argues that Quill should only protect mail-order businesses, and not online sales.  While the President may want to penalize Amazon, and make mail order great again, Congress has made it illegal to discriminate against internet sales.

South Dakota is attempting an unconstitutional online sales-tax land grab. The Quill decision and the ITFA have protected online small businesses from the demands of 46 state tax auditors covering 12,000 jurisdictions and led to a vibrant era of ecommerce that fosters economic growth across the country.”


ITFA Co-Author Speaks Out

Former Congressman Chris Cox (R-CA)

“As co-author of the Internet Tax Freedom Act, I can attest to what Congress was worried about when we made it illegal for states to impose multiple sales tax burdens on out-of-state merchants selling online.

A store in one location doesn’t have monthly tax forms due in states all over the country. But a small internet merchant would, without the rule established by the Internet Tax Freedom Act.

Congress didn’t want different tax collection burdens for e-commerce versus other commerce. When a South Dakota resident buys furniture from a store across the border in Montana, South Dakota doesn’t require the brick-and-mortar seller to remit sales tax. But it does require an internet seller in Montana to do so, for the very same piece of furniture.

Federal statute expressly prohibits what South Dakota has attempted to do. On nine occasions between 1998 and 2016, Congress affirmed and reaffirmed this policy. The Internet Tax Freedom Act, now permanent law, is the definitive statement of congressional policy in this important area of interstate commerce.

This discriminatory treatment is prohibited today by the ITFA.”


 Former Governor Still Waiting for Simplified Tax Collection

Former Va. Gov. James Gilmore

“As the chair of the Advisory Commission on Electronic Commerce, we recommended back in 2000 that Congress require states to deliver substantial simplification and reform of their sales tax systems before erasing the physical presence standard of Quill.

But the states have not simplified, and have actually increased complexity and contradiction among the 46 sales tax states.”


The Voice of the Small Business Owner

Online small business owner Kathy Terrill

“I’m grateful for the protections that Quill provides for my online business. If Quill is overturned, sales tax is weaponized against small businesses like mine.

It is, in effect, taxation without representation.  That is un-American and fundamentally unfair.”


Etsy Stands with Microentrepreneurs

Jill Simeone, Etsy, General Counsel and Secretary

“Overturning Quill would open a floodgate; thousands of inconsistent state and local tax regulations would suddenly apply to small business owners across the country. Requiring Etsy sellers and other microbusinesses to calculate, collect, and remit sales tax in states where they have no physical presence will create stifling administrative burdens and thwart entrepreneurship.

We stand with our community of 1.9 million Etsy sellers—and all microentrepreneurs—and ask the U.S. Supreme Court to support small businesses and leave Quill intact.”


About NetChoice

NetChoice is a trade association of eCommerce and online businesses that share the goal of promoting convenience, choice, and commerce on the net.

NetChoice Files Amicus Brief in South Dakota v. Wayfair,, and Newegg

Deems South Dakota Sales Tax Law Unconstitutional, and Highlights Trump Administration Desire to Stifle Online Commerce and Make Mail Order Great Again

Washington, D.C., April 4, 2018 – A South Dakota law is unconstitutional and breaks with settled law – the Internet Tax Freedom Act (ITFA), per an Amicus brief filed today by NetChoice, former Congressman Chris Cox (R-Ca) and former Virginia Governor James Gilmore, in the case of South Dakota v. Wayfair,, and Newegg.

A central question in the case is whether the U.S. Supreme Court should maintain its current holding that states can only impose sales tax on businesses with a physical presence within their borders. This physical presence rule was most recently affirmed in the 1992 case of Quill vs. North Dakota.  In 2016 South Dakota enacted a law that defies the Quill physical presence standard.

In their brief, Cox, Gilmore, and NetChoice explained: “Congress has repeatedly expressed itself through statute on the tax issues in this case. Exercising its constitutional authority over interstate commerce, Congress enacted ITFA in 1998, after the Supreme Court’s Quill decision. On eight subsequent occasions, Congress revisited this law and reaffirmed its policy.”

“South Dakota is attempting an unconstitutional online sales-tax land grab. The Quill decision and the ITFA have protected online small businesses from the demands of 46 state tax auditors covering 12,000 jurisdictions and led to a vibrant era of ecommerce that fosters economic growth across the country,” said Steve DelBianco, president of NetChoice.

DelBianco added, “The Trump administration now says that Quill should only protect mail-order businesses. While some may want to make mail order great again, Congress has made it illegal to discriminate against internet sales. We’d prefer to have laws that foster a brighter future instead of forcing us to return to the past.”

Below are key quotes from the amicus brief of former Congressman Chris Cox, Former Virginia Governor Jim Gilmore, and NetChoice:


Prevent new burdens on small businesses and discrimination against online sellers:

South Dakota has enacted a law that it acknowledges violates this Court’s precedents. Its transparent purpose was to provoke litigation that, it hopes, will be rewarded by the Court’s reversal of its prior rulings. [p.2]

Regarding the Internet Tax Freedom Act (ITFA), first enacted by Congress in 1998 — after the Quill ruling:

South Dakota’s law violates the ITFA by imposing burdens on internet transactions that retailers using other channels are not required to bear. [p.3]

A small business that maintains a website cannot choose whether to purposely avail itself of one or another jurisdiction. [p.10-11]

The law specifically prohibits assigning the tax collection burden to a different person in internet and non-internet transactions. [p.13]

The discriminatory effect of South Dakota’s law is explained on pages 13-14:

When, for example, a resident of South Dakota buys furniture from a retailer in Montana—picking up the goods herself, and bringing them home—South Dakota law requires her to pay use tax. But South Dakota does not impose a use tax collection burden on the out-of-state seller.

Unless, that is, the out-of-state seller is an Internet vendor.

In that case, the rule is different. If the furniture purchase is accomplished via the Internet (or via the telephone, or the mail), South Dakota’s new law does require the Montana seller to collect and pay, even though Montana has no sales tax.

This differential treatment is what the ITFA prohibits.

The result of overturning Quill would be to force small Internet sellers to comply with the conflicting rules of thousands of differentiated taxing sub-jurisdictions. The non-Internet merchant would have no such burden. This is precisely the result ITFA sought to avoid as a matter of national policy. [p.4]


The Trump Administration wants to preserve physical presence protection only for mail orders:

The Trump administration’s suggestion “that the Court can simply limit Quill to catalog sellers and discriminate for Commerce Clause purposes between catalog sellers and internet commerce also would violate the ITFA.” [p.3]

The Solicitor General proposes that the Court limit Quill’s nexus requirement to mail-order catalogs. This would permit South Dakota to impost unique tax-collection obligation on remote internet sellers that don’t apply to other remote sellers. The ITFA flatly prohibits this. [p.20]

The Solicitor General’s proposal runs afoul of the ITFA in yet another way. His idea that remote Internet sellers are “virtually” present in every State where a consumer can access its website violates the express prohibition against using as a factor for determining nexus the “sole ability [of persons within a State] to access a site on a remote seller’s out-of-State computer server.” [p.21]


There are significant due process problems with the South Dakota law:

An out-of-state seller may establish contact with an individual South Dakota purchaser online, but that does not show any relationship with the State itself. [p.23]

South Dakota’s law imposes tax collection obligations on out-of-state sellers without regard to whether they intentionally created a substantial relationship with that State. [p.24]

Not only would the increased burden on these sellers cause “practical problems” that Due Process protections are meant to curb, but by imposing steep costs and driving some companies out of the market, it would, ironically, reduce the States’ potential for increasing their tax revenues. [p.27]


Congress alone has the constitutional role to determine state taxation of interstate commerce:

As Justice Ginsburg has recently observed, “there is nothing nuanced” about what courts do by deciding a case one way or the other, while Congress “can write a statute that takes account of various interests.” [p.6]

The Internet Tax Freedom Act (ITFA) “is intended to provide “certainty” that the rules of Quill’s physical-presence test “will continue to apply to electronic commerce just as they apply to mail-order commerce, unless and until a future Congress decides to alter the current nexus requirements.” [p.13]

On page 9, former Congressman Cox further explains congressional intent for enactment of the ITFA:

Congress and the White House, in 1998 and 2016 and all points in between, believed otherwise. The specter of multiple States and municipalities all simultaneously taxing and regulating commerce on the Internet was seen as the far greater concern

The fact that large in-state sellers would be challenged by small enterprises via the Internet was seen as a boon to competition and consumers alike.

Those small businesses – in South Dakota and elsewhere – can only compete if they are not overwhelmed with a nationwide tax compliance burden simply by virtue of selling via the internet. [p.33]



About NetChoice

NetChoice is a trade association of eCommerce and online businesses that share the goal of promoting convenience, choice, and commerce on the net.

NetChoice Welcomes Wayfair Brief Filing, Providing Strong Arguments

Washington D.C. – Today, NetChoice has welcomed the filing of Wayfair and Overstock’s brief in the case South Dakota v. Wayfair, Inc.,, Inc, and Newegg, Inc.

“The brief shows that removing Quill’s physical presence protection would fundamentally undermine small businesses serving customers outside their state,” said Steve DelBianco, President of NetChoice.

“The states are so wrong to claim that small businesses would be unaffected,” continued DelBianco. “States may provide “free” tax software, but the costs of integration and answering to 46 state auditors would be a significant burden to any small business going online to reach new customers.”


Below are key quotes from Wayfair and Overstock’s brief, providing a strong introduction to the points that will define this Supreme Court case:

“What occurs inside a state’s borders has always been the critical foundation for a state’s taxing and regulatory authority; in short, borders matter.” [p.11]

“Changed conditions in the retail marketplace also cannot justify the abrogation of the physical presence rule where the constitutionally-significant conditions remain unchanged.” [p.25]

“Congress is the institution best-suited to resolve the competing interests in remote sales tax collection and to select the proper policy outcome… Overruling Quill would complicate, if not prevent, a congressional solution.” [p.26]

“Small businesses seeking access to a national market, not the massive multi-channel retailers that already report sales tax across the country, will be harmed most by the new compliance burdens, new barriers to entry, and new obstacles to growth.” [p.27]

NetChoice Welcomes RTPA-Free Omnibus

Washington D.C. – Today, NetChoice welcomes news that the Remote Transactions Parity Act (RTPA) will not be included in the spending omnibus, allowing Congress to come up with a real solution to collect sales tax from online sales.

“RTPA never deserved a seat on the omnibus, since it was ridiculously hard for America’s small businesses that sell online,” said Steve DelBianco, President of NetChoice. “Congress should now find a better way to stop state tax collectors from harassing any business anywhere in the country, whichever way the supreme court rules on Quill.”