South Dakota and many states around the country want online retailers to collect and remit state sales taxes. Next month, the Supreme Court will hear a case that would decide if they will.
The state of South Dakota says it’s unfair online retailers don’t have to collect the same sales taxes main street stores have to.
Online retailers argue it’s discrimination to force them to collect those taxes.
It would be like expecting a South Dakota person who goes into North Dakota, that North Dakota store to collect, remit, all the sales taxes back to South Dakota,” Carl Szabo, VP and General Counsel of Netchoice, said.
“In that example, that North Dakota Business would already be collecting North Dakota taxes. So, we just want it to be fair,” Marty Jackley, South Dakota Attorney General, said.
In a previous case, Quill v. North Dakota the Supreme Court ruled states can’t force retailers to collect sales taxes if the retailer doesn’t have a physical presence in the state.
South Dakota wants the Supreme Court to overturn the Quill decision. Attorney General Jackley says a lot has changed since the 1992 ruling.
“The internet didn’t exist as it does today, so those Justices would not have been able to consider what e-commerce has done, what technology has done.”
Szabo says overturning the Quill decision would have serious consequences for online and main street retailers.
“A small to midsize main street store decides to go online and overnight has to immediately figure out and comply with twelve thousand different tax jurisdictions and subject themselves to and subject themselves to 46 different state audits,” Szabo said.
The white house weighed on Wednesday.