Washington, DC, April 17, 2018 – Earlier today, the United States Supreme Court heard oral arguments in the case of South Dakota v. Wayfair, et.al. 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.”
NetChoice is a trade association of eCommerce and online businesses that share the goal of promoting convenience, choice, and commerce on the net.