'Footprint' ruling could impact taxes, businesses

Tuesday, January 16, 2018
 | 
Chris Woodward (OneNewsNow.com)

U.S. Supreme Court w/ flagA longtime U.S. Supreme Court decision involving states and taxes could be on the brink of being overturned, and one organization hopes that does not happen.

The nation's high court has agreed to hear the case South Dakota v. Wayfair, Inc.

At issue is whether the Supreme Court should abrogate Quill Corp. v. North Dakota's sales-tax only, physical presence requirement.

"This is a concerning development for taxpayers and small businesses all across the country," says economist Jonathan Williams of the American Legislative Exchange Council (ALEC). "For more than 25 years, the Supreme Court has stood by its Quill decision, which supports the idea that states cannot reach across their borders to tax out-of-state businesses if those businesses don't have a physical footprint within a state."

The Supreme Court has been urged by a number of groups, including some state governments to say, "Let's do away with this decision."

The argument is that business and retail is different today than it was in the early 1990s when the Quill ruling was made. Quill also predates websites such as Amazon and eBay.

"There's a lot of cash at stake," writes Emily Stewart of Vox.com. "The Government Accountability Office estimates that state and local governments could have collected up to $13 billion more in 2017 had they been allowed to require sales tax payments from online sellers, as Bloomberg notes.

According to Stewart, all but five states — Alaska, Delaware, Montana, New Hampshire and Oregon — impose sales taxes, meaning South Dakota v. Wayfair is a national issue.

"Some legislators say that Quill is the thing that's keeping them from acting," she continues. "A bipartisan group of lawmakers signed a brief asking the Supreme Court to hear South Dakota v. Wayfair and overturn Quill. They say that Congress has been unable to reach a consensus on a legislative solution and that the impasse is the result of "structural advantages and disadvantages created by the Quill decision.""

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