Excerpt from Joseph Lawler at the Washington Examiner:
The Supreme Court ruled Thursday that states can require out-of-state online retailers to collect sales taxes, reversing a previous high court decision that limited collections to stores with a physical presence.
In a 5-4 decision written by Anthony Kennedy, the court ruled that that physical presence standard is “unsound and incorrect.”
The ruling in South Dakota v. Wayfair, Inc., provides a major win for brick-and-mortar retailers and state governments hungry for tax revenues. The Trump administration, too, had sought greater latitude for online sales taxes, splitting with many conservatives.
Thursday’s ruling did not fall along the usual partisan lines, as justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito, and Neil Gorsuch joined with Kennedy.
The ruling undid a previous decision, 1992’s Quill Corp. v. North Dakota, that set the precedent that states could not require out-of-state sellers with no physical presence to collect sales taxes on in-state sales.
Some conservative groups also oppose allowing states to tax out-of-state retailers, on the grounds that it would allow governments to tax people who have no democratic control over them.
“Congress must act in the American people’s best interest and pass specific legislation that protects small business and consumers from unnecessary online taxes,” said Jason Pye, vice president of legislative affairs for Freedomworks. (emphasis added)
Read more at the Washington Examiner
Today, Americans for Tax Reform President Grover Norquist issued the following statement on the South Dakota v. Wayfair decision:
“Today the Supreme Court said ‘yes—you can be taxed by politicians you do not elect and who act knowing you are powerless to object.’ This power can now be used to export sales taxes, personal and corporate income taxes, and opens the door for the European Union to export its tax burden onto American businesses—as they have been demanding.
If physical nexus is no longer required, as the Quill vs. ND case demanded, for sales taxes then it is no longer required for personal or corporate income taxes.
Now, California (or any state or city that loses population through exit) can tax people and businesses who do their best to avoid that state or city.
We fought the American Revolution in large part to oppose the very idea of taxation without representation. Today, the Supreme Court announced, ‘oops’ governments can now tax those outside their borders—those who have no political power, no vote, no voice.”