SUPREME COURT TO DETERMINE WHETHER REMOTE SELLERS ARE REQUIRED TO COLLECT AND REMIT USE TAXES
April 13, 2018
In South Dakota v. Wayfair Inc. et al, the U.S. Solicitor General filed an amicus brief on March 6, 2018 outlining the U.S. Government’s position that states have the authority to compel remote sellers to collect and remit a use tax. Such remote sellers would include travel agents and other sellers of travel tickets.
The Solicitor General stated that “’[i]n light of internet retailers’ pervasive and continuous virtual presence in the states where their websites are accessible, the states have ample authority to require those retailers to collect state sales taxes owed by their customers[.]’” The case was appealed to the Supreme Court due to a South Dakota law which requires businesses to collect state sales taxes if they sell more than $100,000 of goods inside South Dakota annually, even if they have no physical presence in the state. Opponents of the South Dakota tax argued that the Supreme Court’s 1992 decision in Quill Corp. v. North Dakota holds that a state can collect sales tax only from a retailer that has a physical presence in the state. The Solicitor General argued that the Quill decision did not contemplate the modern pervasiveness of e-commerce and its effects on traditional sales tax obligations and, as a result, the Supreme Court should depart from its previous holding.
The Supreme Court has not yet scheduled oral argument for the case, but it will likely be heard during the 2018 Summer Term.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).
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