There’s been little movement in the Indiana case since a complaint was filed in June 2017 by Washington-based NetChoice and the American Catalog Mailers Association (ACMA), asking an Indiana trial court to strike down House Enrolled Act 1129. The statute requires out-of-state retailers to collect and remit Indiana sales tax if those sellers have 200 or more transactions in the state or sell $100,000 or more in-state.
Steve DelBianco, executive director of NetChoice, previously told Bloomberg Tax in September 2017 that he was “confident that the court would grant an injunction barring enforcement of the Indiana law, just as a South Dakota court did in March by invalidating a nearly identical law there.”
“It’s a delicious irony how Massachusetts argues that a Virginia court lacks jurisdiction over the Massachusetts DOR, while at the same time claiming their DOR has tax jurisdiction over Virginia retailers who lack any physical presence in Massachusetts,” DelBianco said.
However, critics say the tax would pose an “unreasonable tax burden” on online businesses. Steve DelBianco, who serves as president of NetChoice, an e-commerce trade organization, said states are imposing unreasonable burdens on out-of-state businesses, according to Reuters. Others argue that consumers will be hit in the wallet by the move.
But NetChoice – which counts eBay, Google, and Facebook among its members – argues that requiring retailers to collect tax in every state and local jurisdiction in the US would unfairly burden companies. Since the beginning of online sales by remote sellers, states have struggled to find ways to collect tax revenue from the sales into their states by sellers located outside the state.
NetChoice — a group that represents online retailers including Overstock.com, eBay and PayPal — says the Baker administration doesn’t have the authority to tax businesses with no actual presence in Massachusetts.
But NetChoice – which counts eBay, Google, and Facebook among its members – argues that requiring retailers to collect tax in every state and local jurisdiction in the US would unfairly burden companies. Courts in South Dakota blocked the law, saying they were bound by U.S. Supreme Court precedent. However, the measure was stalled in the House Judiciary Committee.
Steve DelBianco of NetChoice, which strongly opposes S.B. 106 and has challenged similar laws in other states, said, “It’s not the decision we sought, but we’re glad the nation’s highest court will learn how new state laws are imposing unreasonable tax burdens on out-of-state businesses.”
Hamilton Davison, president of the American Catalog Mailers Association Inc., which has spearheaded legal challenges with NetChoice, took a similar position and said he is hopeful the Court can separate the “rhetoric from the reality of forcing sales tax collection burdens on remote sellers.”
NetChoice Executive Director Steve DelBianco has said many thousands of smaller businesses would bear disproportionate burdens and costs if they are forced to become tax collectors for 12,000 jurisdictions across 46 states.
Meanwhile ecommerce trade group NetChoice says states already have a way to collect taxes on purchases made by residents from out-of-state retailers – they require their own citizens to pay “use” tax for transactions in which out-of-state retailers don’t collect the “sales” tax.
Steve DelBianco, president of NetChoice, an association of online businesses and consumers, said the justices “will learn how new state laws are imposing unreasonable tax burdens on out-of-state businesses”.
Trade Associations React
Steve DelBianco, president and CEO of NetChoice, a Washington-based internet commerce trade association, told Bloomberg Tax that while today’s decision wasn’t the one his organization wanted, he’s glad “the nation’s nighest court will learn new state laws are imposing unreasonable tax burdens on out-of-state businesses.
“On our side are Supreme Court precedent and the US Constitution, so we look forward to airing the concerns of America’s small businesses,” DelBianco added.