WASHINGTON (BRAIN) — The National Sporting Goods Association and the National Retail Federation — along with the attorneys general from 35 states and the District of Columbia — have signed on to support South Dakota’s efforts to overturn a key ruling that exempts online retailers from collecting state sales taxes.
The trade groups and AGs have filed Friends of the Court briefs asking the U.S. Supreme Court to hear South Dakota’s case next year.
Two years ago, Justice Anthony Kennedy said that the court made a mistake in its 1992 ruling on Quill Corp. v. North Dakota. That ruling said that Quill, an office products mail order company, did not have to collect state sales taxes in states where Quill did not physically do business. Two years ago, Kennedy invited opponents of the decision to bring a new case that would allow the Court to correct its mistake. The new case that the Supreme Court is being asked to review is South Dakota v. Wayfair, Inc., Overstock.com, Inc., and Newegg, Inc.
The NSGA said the Quill ruling had created an “unfair sales tax loophole” that contributed to the decline in retail store fronts in the last 25 year, while costing states billions in uncollected taxes.
NSGA and NRF, along with PeopleForBikes, also support federal legislation that would permit states to require out-of-state internet sellers to collect state sales tax. Proponents of that legislation estimate that nearly $30 billion in sales taxes go uncollected nationwide.
Related: Washington Post article on Justice Kennedy's 2015 remarks.
