A South Dakota decision moves the online sales tax issue closer to the US Supreme Court

South Dakota’s Supreme Court affirms a lower court ruling against a state law designed to challenge the prevailing law that allows many online retailers to avoid collecting sales tax.

Since the birth of e-commerce, online retailers have been shielded from the requirement to collect sales tax from consumers who live in those states where the retailer does not have a physical presence, such as an office, store or warehouse. The U.S. Supreme Court likely will soon have the chance to change that.

The question of whether out-of-state online retailers can be required to collect sales tax moved a big step closer to the nation’s highest court today when the South Dakota Supreme Court upheld a lower court’s decision barring enforcement of a 2016 state law that requires larger e-retailers to collect sales tax from South Dakota residents and remit them to the state.

In passing the law last year, South Dakota lawmakers made clear they wanted to give the U.S. Supreme Court an opportunity to reconsider its 1992 decision in a case generally known as Quill Corp. v. North Dakota. The court in that case ruled that Quill, a catalog retailer, did not have to collect sales tax in North Dakota where it had no physical presence. Online retailers have used that decision to argue that they need not collect sales tax in states where they have no physical locations, allowing them to charge lower overall prices than bricks-and-mortar retailers that must collect sales tax.

South Dakota Attorney General Marty Jackley congratulated the court for moving quickly on the case and left little doubt that the state would pursue an appeal to the U.S. Supreme Court, giving it an opportunity to overturn the 1992 Quill decision.

“The purpose of South Dakota’s current litigation is to give the United States Supreme Court an opportunity to reconsider Quill in light of the extraordinary growth of the internet and the exponential technological advances that have been made in the last quarter century,” Jackley said in a statement following today’s ruling. “If the U.S. Supreme Court ultimately strikes down Quill, retail sales tax obligation can be applied fairly to both internet and main street businesses.”
more at:  https://www.digitalcommerce360.com/2017/09/14/south-dakota-decision-moves-online-sales-tax-issue-closer-u-s-supreme-court/

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