Source: Senator Heidi Heitkamp - (D - ND)
Washington, D.C. - November 4, 2017 (The Ponder News) -- U.S. Senator Heidi Heitkamp submitted an amicus brief to the U.S. Supreme Court urging the Court to reconsider and overturn a 25 year-old case determining whether states can require out-of-state businesses like online vendors to collect and remit state sales and use taxes.
In 1991, when Heitkamp was North Dakota’s Tax Commissioner, the state of North Dakota attempted to make catalog retailers collect the sales and use tax the state and municipalities were already owed on sales. Heitkamp brought the case all the way to the Supreme Court, which in 1992 found in Quill Corp v. North Dakota that a business must have a physical presence in a state before it can be required to collect and remit state sales and use taxes. The Court also said that the U.S. Congress had the ultimate power to resolve the issue.
Since then, the sharp increase in internet sales has sparked renewed interest from state and local governments in leveling the playing field for brick-and-mortar businesses and closing a gaping loophole in our tax system. While the members have put forward a legislative solution in the Marketplace Fairness Act, Congress has not come to an agreement to fix the loophole.
Joining Heitkamp in filing the amicus brief are U.S. Senators Mike Enzi (R-WY), Dick Durbin (D-IL), and Lamar Alexander (R-TN), along with U.S. Representatives Kristi Noem (R-SD) and John Conyers (D-MI),
“Small businesses in our states – and the workers who rely on them for jobs – have long been disadvantaged by out-of-state retailers and online vendors who aren’t required to collect sales and use taxes,” the members said. “When these retailers can charge lower prices, our small businesses and jobs are at risk. The Supreme Court should re-visit and reverse its decision in Quill that tipped the scales in favor of online retailers and against brick and mortar businesses around the country, which lose close to $26 billion every year because of a misguided decision over two decades ago. It’s past time to level the playing field for local shops across our communities.”
Retailers without a physical presence have a price advantage over brick and mortar businesses of up to 8.5 percent in North Dakota, 9.75 percent in Tennessee, 11 percent in Illinois, and 6 percent in Wyoming simply because they cannot be required to collect those state taxes.
Click here to read the full text of the amicus brief.
The amicus brief – also called a “friend of the court” brief that is filed by outside parties and is used to share additional information and arguments for the Court to consider – urges the Supreme Court to grant South Dakota’s request for the Court to consider South Dakota v Wayfair, Inc. This case seeks to overturn Quill, which prevents South Dakota and 44 other states from enforcing their own state sales and use tax laws.
On April 27, Enzi, Durbin, Alexander, and Heitkamp introduced the Marketplace Fairness Act of 2017 – legislation that would give states the right to require out-of-state businesses or online retailers to collect and remit the sales and use taxes that are already owed under current law. In 2013, the Senate passed the Marketplace Fairness Act by a bipartisan vote of 69-27, but the legislation did not become law.
Noem and Conyers introduced similar legislation in the House of Representatives on April 27 — the Remote Transactions Parity Act – which has 49 bipartisan cosponsors and has been referred to the House Judiciary Committee.
See more headlines at The Ponder News Web Site
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Showing posts with label sales tax. Show all posts
Showing posts with label sales tax. Show all posts
Saturday, November 4, 2017
Tuesday, October 10, 2017
SOUTH DAKOTA ASKS SUPREME COURT TO ACCEPT SALES TAX CASE
Source: National Conference of State Legislature
By Lisa Soronen
South Dakota has filed a petition in South Dakota v. Wayfair asking the U.S. Supreme Court to hear a challenge to its law requiring out-of-state retailers to collect sales tax.
Mouse in shopping cartIn Quill Corp. v. North Dakota (1992), the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales tax.
In March 2015 Justice Anthony Kennedy wrote a concurring opinion stating that the “legal system should find an appropriate case for this court to re-examine Quill.” Kennedy criticized Quill in Direct Marketing Association v. Brohl for many of the same reasons the State and Local Legal Center stated in its amicus brief. Specifically, internet sales have risen astronomically since 1992 and states and local governments are unable to collect most taxes due on sales from out-of-state vendors.
Following the Kennedy opinion, a number of state legislatures passed legislation requiring remote vendors to collect sales tax. South Dakota’s law is the first to be ready for review by the U.S. Supreme Court. In September the South Dakota Supreme Court ruled that the South Dakota law is unconstitutional because it clearly violates Quill and it is up to the U.S. Supreme Court to overrule it.
Ruling in South Dakota’s favor will require the U.S. Supreme Court to take the unusual step of overruling precedent. In its petition South Dakota explains why the court should agree to hear this case and rule in its favor:
"Quill clearly needs to go. When this court considers overruling its precedent, it looks to whether the existing rule:
(1) is constitutional or statutory;
(2) has engendered reliance interests;
(3) has been undermined by changed circumstances;
(4) has been consistently criticized as inconsistent with broader doctrine; and (5) has proven “unworkable” or “outdated” with experience.
Quill fares poorly on every measure. It is a severely criticized, constitutional holding that itself warned when decided that it might later be reconsidered. It is also, in Justice Gorsuch’s words, a 'precedential island[] … surrounded by a sea of contrary law.' And after 25 years of technological progress and economic changes, it has proven entirely out of date."
At this point all South Dakota is asking the U.S. Supreme Court to do is agree to hear its case. The Supreme Court review is discretionary. Four of the nine Supreme Court justices must agree to hear any case. If the court refuses to do so, the South Dakota Supreme Court ruling that South Dakota’s law is unconstitutional will stay in place.
It is possible the court could hear this case this term meaning it would issue an opinion by the end of June 2018.
Lisa Soronen is executive director of the State and Local Legal Center and a frequent contributor to the NCSL Blog on judicial issues.
By Lisa Soronen
South Dakota has filed a petition in South Dakota v. Wayfair asking the U.S. Supreme Court to hear a challenge to its law requiring out-of-state retailers to collect sales tax.
Mouse in shopping cartIn Quill Corp. v. North Dakota (1992), the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales tax.
In March 2015 Justice Anthony Kennedy wrote a concurring opinion stating that the “legal system should find an appropriate case for this court to re-examine Quill.” Kennedy criticized Quill in Direct Marketing Association v. Brohl for many of the same reasons the State and Local Legal Center stated in its amicus brief. Specifically, internet sales have risen astronomically since 1992 and states and local governments are unable to collect most taxes due on sales from out-of-state vendors.
Following the Kennedy opinion, a number of state legislatures passed legislation requiring remote vendors to collect sales tax. South Dakota’s law is the first to be ready for review by the U.S. Supreme Court. In September the South Dakota Supreme Court ruled that the South Dakota law is unconstitutional because it clearly violates Quill and it is up to the U.S. Supreme Court to overrule it.
Ruling in South Dakota’s favor will require the U.S. Supreme Court to take the unusual step of overruling precedent. In its petition South Dakota explains why the court should agree to hear this case and rule in its favor:
"Quill clearly needs to go. When this court considers overruling its precedent, it looks to whether the existing rule:
(1) is constitutional or statutory;
(2) has engendered reliance interests;
(3) has been undermined by changed circumstances;
(4) has been consistently criticized as inconsistent with broader doctrine; and (5) has proven “unworkable” or “outdated” with experience.
Quill fares poorly on every measure. It is a severely criticized, constitutional holding that itself warned when decided that it might later be reconsidered. It is also, in Justice Gorsuch’s words, a 'precedential island[] … surrounded by a sea of contrary law.' And after 25 years of technological progress and economic changes, it has proven entirely out of date."
At this point all South Dakota is asking the U.S. Supreme Court to do is agree to hear its case. The Supreme Court review is discretionary. Four of the nine Supreme Court justices must agree to hear any case. If the court refuses to do so, the South Dakota Supreme Court ruling that South Dakota’s law is unconstitutional will stay in place.
It is possible the court could hear this case this term meaning it would issue an opinion by the end of June 2018.
Lisa Soronen is executive director of the State and Local Legal Center and a frequent contributor to the NCSL Blog on judicial issues.
Tuesday, August 29, 2017
SOUTH DAKOTA SALES TAX CASE COULD LEAD TO SCOTUS REVIEW OF 1992 QUILL DECISION
by the Retail Industry Leaders Association
Washington, D.C. - August 29, 2017 (The Ponder News) -- The South Dakota Supreme Court heard oral arguments today in a case that could ultimately persuade the United States Supreme Court to revisit Quill Corp v. North Dakota, a 1992 decision that forbade states from requiring retailers without a physical presence to collect sales tax. In the twenty-five years since the decision, online commerce has exploded, and many policymakers have called for an end to the "loophole" that has given online sellers a distinct competitive advantage over brick and mortar stores.
"The artificial price advantage created by the United States Supreme Court and enjoyed by online-only sellers for two decades has created a significant market distortion, an inequity that has led to the shuttering of thousands of brick and mortar stores," said Retail Litigation Center President Deborah White. "The time has come to rectify this bias and restore basic free market competition."
The case heard today stems from a South Dakota statute passed in 2016 designed to challenge Quill directly. The law, passed overwhelmingly by the Legislature and signed by Governor Dennis Daugaard last spring, requires out-of-state retailers to collect and remit sales tax if they transact more than $100,000 of business in the state or more than 200 sales. The law was signed roughly one year after U.S. Supreme Court Justice Anthony Kennedy recognized in his concurring opinion in DMA v. Brohl that, "[t]he Internet has caused far-reaching systemic and structural changes in the economy" so that "a business may be present in a State in a meaningful way without that presence being physical in the traditional sense of the word." Noting the significant economic harms that were befalling state treasuries and local retailers, Justice Kennedy said that "it is unwise [for the US Supreme Court] to delay any longer a reconsideration of the Court's holding in Quill" and asked the "legal system [to] find an appropriate case for this Court to reexamine Quill."
State and local governments are as anxious as local retailers for a solution. As online sales have grown exponentially, states have experienced a significant erosion of their sales tax base. While many states have been successful tweaking nexus laws and enacting various sales and use tax compliance measures, no state has come close to fully recovering the revenues lost due to Quill. The combination of fewer storefronts and a deteriorating tax base has meant a slow decline in revenue for the 45 states and the District of Columbia that rely on sales tax revenues to fund state and local government operations. States have sought a solution from Congress for more than a dozen years, but despite multiple bill introductions by supportive members of both parties, these efforts have not led to legislation passing both Chambers of Congress.
"States have done virtually everything they can to solve this problem, but it's simply not enough," said White. "Congressional inaction means the only hope for retailers and the states is for the Supreme Court to revisit the Quill decision. This is an appropriate step since the U.S. Supreme Court created this distinction in the first place."
"We are hopeful that the South Dakota Supreme Court will quickly issue an opinion that explains to the federal court the harm the pre-Internet Quill decision has inflicted on both the states and local retailers," added White. "With a quick ruling, it's possible that the U.S. Supreme Court could choose this case to bring resolution to the states and merchant community during its October 2017 term."
RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.
Washington, D.C. - August 29, 2017 (The Ponder News) -- The South Dakota Supreme Court heard oral arguments today in a case that could ultimately persuade the United States Supreme Court to revisit Quill Corp v. North Dakota, a 1992 decision that forbade states from requiring retailers without a physical presence to collect sales tax. In the twenty-five years since the decision, online commerce has exploded, and many policymakers have called for an end to the "loophole" that has given online sellers a distinct competitive advantage over brick and mortar stores.
"The artificial price advantage created by the United States Supreme Court and enjoyed by online-only sellers for two decades has created a significant market distortion, an inequity that has led to the shuttering of thousands of brick and mortar stores," said Retail Litigation Center President Deborah White. "The time has come to rectify this bias and restore basic free market competition."
The case heard today stems from a South Dakota statute passed in 2016 designed to challenge Quill directly. The law, passed overwhelmingly by the Legislature and signed by Governor Dennis Daugaard last spring, requires out-of-state retailers to collect and remit sales tax if they transact more than $100,000 of business in the state or more than 200 sales. The law was signed roughly one year after U.S. Supreme Court Justice Anthony Kennedy recognized in his concurring opinion in DMA v. Brohl that, "[t]he Internet has caused far-reaching systemic and structural changes in the economy" so that "a business may be present in a State in a meaningful way without that presence being physical in the traditional sense of the word." Noting the significant economic harms that were befalling state treasuries and local retailers, Justice Kennedy said that "it is unwise [for the US Supreme Court] to delay any longer a reconsideration of the Court's holding in Quill" and asked the "legal system [to] find an appropriate case for this Court to reexamine Quill."
State and local governments are as anxious as local retailers for a solution. As online sales have grown exponentially, states have experienced a significant erosion of their sales tax base. While many states have been successful tweaking nexus laws and enacting various sales and use tax compliance measures, no state has come close to fully recovering the revenues lost due to Quill. The combination of fewer storefronts and a deteriorating tax base has meant a slow decline in revenue for the 45 states and the District of Columbia that rely on sales tax revenues to fund state and local government operations. States have sought a solution from Congress for more than a dozen years, but despite multiple bill introductions by supportive members of both parties, these efforts have not led to legislation passing both Chambers of Congress.
"States have done virtually everything they can to solve this problem, but it's simply not enough," said White. "Congressional inaction means the only hope for retailers and the states is for the Supreme Court to revisit the Quill decision. This is an appropriate step since the U.S. Supreme Court created this distinction in the first place."
"We are hopeful that the South Dakota Supreme Court will quickly issue an opinion that explains to the federal court the harm the pre-Internet Quill decision has inflicted on both the states and local retailers," added White. "With a quick ruling, it's possible that the U.S. Supreme Court could choose this case to bring resolution to the states and merchant community during its October 2017 term."
RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.
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