Twenty five years after the United States Supreme Court created the loophole that today allows Internet-only sellers to evade state sales tax collection, the Court has granted South Dakota’s petition for certiorari in South Dakota v. Wayfair, Inc., Overstock.com, Inc., and Newegg, Inc.
By taking the case, the Court can end the carve out created by Quill and validate efforts by states and the merchant community to create a level playing field for all retailers.
“The Court’s decision to grant South Dakota’s petition is an important signal for retailers that invest in storefronts and jobs in local communities,” said RILA General Counsel and Retail Litigation Center President Deborah White. “Retailers have supported this case since the beginning, and believe it is the right case to correct the constitutional course set more than 50 years ago — well before the advent of e-commerce — that today gives online-only retailers an unfair commercial advantage at the expense of local retailers.”
“The retail community is grateful that the Court has recognized the extraordinary importance of this issue,” said White. “Retailers hope that the Court will ultimately conclude that the economic-nexus standard is a more appropriate way to decide today which retailers must collect sales tax than the physical-presence test created more than a half century ago. In doing so, the Court will validate efforts by the states to treat community and absentee retailers equally when they conduct business with consumers in their state.”