US Supreme Court to Hear Case on Ecommerce Taxation

Elias Hubbard
January 13, 2018

When Sen. Heidi Heitkamp, D-N.D., got the news that the U.S. Supreme Court would be taking up a case on state's rights to collect sales tax on online sales, she just started smiling.

Large brick-and-mortar retailers like Walmart and Target have long bemoaned the fact that they have to collect sales tax on online purchases because they have physical stores nationwide.

Further extending a drawn-out legal battle, the U.S. Supreme Court on Friday agreed to hear a case over whether Texas' congressional and House district boundaries discriminate against voters of color.

The United States Supreme Court has agreed to hear the state of South Dakota's argument that a 26-year-old tax-related ruling be overturned, which could free state and local governments to collect billions in internet sales tax, according to a report today from Bloomberg. The Government Accountability Office estimates that, had they been allowed, states and local governments could have collected as much as $13 billion in additional taxes on online sales. But the case before the Supreme Court does directly affect other online retailers, including Overstock.com, home goods company Wayfair and electronics retailer Newegg, who are part of the case the court accepted.

The high court granted Washington's certiorari petition concerning a Ninth Circuit panel's June 2016 ruling that the culverts - built when roads cross a river or stream - degrade fish habitat and decimate fish populations, in violation of federal treaties with several tribes.

South Dakota's law was passed partly in response to a concurring opinion written by Justice Anthony Kennedy in a unanimous 2015 Supreme Court ruling that allowed a challenge to a Colorado law encouraging retailers to collect the taxes to go forward.

South Dakota's law places the burden of collecting and remitting sales taxes on companies that do at least $100,000 in sales or handle at least 200 transactions in the state. But their first attempt to do so was vacated by the Supreme Court, which again left the state without valid maps with a primary election looming. The high court a year ago heard arguments in a Wisconsin case over the limits of partisan gerrymandering and whether extreme practices can be deemed unconstitutional. "I hope this means the Court is open to revisiting the important issue of taxation of online sales".

"Sales tax collection has become more complex as the number of tax jurisdictions has more than doubled since 1992", they argued in court papers.

Last summer, after the three-judge panel invalidated some of the congressional and state House districts, finding they violate the U.S. Constitution and the U.S. Voting Rights Act, the state and plaintiffs had been preparing to meet to take up remedial maps, when the Supreme Court temporarily blocked the lower court ruling and the hearings were canceled. "Moreover, the integration of tax collection software is extraordinarily expensive".

"Retail is a dynamic industry that's rapidly transforming".

South Dakota has no state income tax and relies heavily on sales taxes to fill state coffers.

Other reports by Click Lancashire

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