US SUPREME COURT DEALS BODY BLOW TO CONSUMERS AND SMALL ONLINE BUSINESSES, NETCHOICE SAYS

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.”

1 reply
  1. Shane
    Shane says:

    I sure hope Congress does something soon. My wife and I have been selling online since 1999 and have worked for years to build up our business. There really needs to be a small business exemption or I don’t know what we’ll do. Our web business is our livelihood — our only means of support. If Congress doesn’t act:

    1) We may be forced to close and lose everything we worked years for,
    2) If we find some means of complying with collecting and remitting sales taxes for 12,000 jurisdictions, we’ll face even more unfair competition from Chinese sellers via Ali Babba and now JD.com after their partnership with Google. The Chinese won’t have to collect and remit sales tax for 12,000 jurisdictions and can sell online at an even bigger advantage over US sellers (they already have a sweetheart deal from the US Postal Service with ePacket shipping).

    This issue really hits home for us. Selling online is a difficult occupation, and one we’ve put our heart and soul into. Competition with the likes of Amazon and the Chinese is difficult enough, but I never imagined that my own country would put me out of business and kill my American dream.

    Reply

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