Alabama Attorney General Steve Marshall joined AGs from 34 other states and the District of Columbia in filing a friend-of-the-court brief backing the sales tax collection efforts.
- New Hampshire online retailers could be on the hook to collect sales tax from dozens of states and thousands of localities after the U.S. Supreme Court Thursday upheld South Dakota's online sales tax law. That case involved Colorado's attempt to collect taxes from online retailers indirectly by making them report sales to the state.
The case also stemmed from a challenge from the state of North Dakota, which argued that it was losing an estimated $50 million in taxes because of the previous rules.
"When the day-to-day functions of marketing and distribution in the modern economy are considered, it is all the more evident that the physical presence rule is artificial in its entirety", Justice Anthony Kennedy wrote. Kennedy wrote that the rule "limited States' ability to seek long-term prosperity and has prevented market participants from competing on an even playing field". Now, rivals will be charging sales tax where they hadn't before.
Nellen said it's also possible Congress will step in and "tone down" the ruling, or "require states to do something to make it easier".
The Retailers Association of MA called the ruling a big win for businesses.
State and local governments had grown increasingly agitated as sales from brick and mortar retailers gave way to online retail, which now comprises approximately 9.5% of the dollar value of total purchases. That's because they typically have a physical store in whatever state the purchase is being shipped to. So you might have to start paying sales tax alongside those non-Prime shipping charges.
That's a big issue, considering that e-commerce sales in the US were $435.5 billion a year ago, vs. $180 billion in mail-order sales in 1992 when the court issued its first ruling on interstate sales and taxes. Still, eBay called on Congress "to provide clear tax rules with a strong small business exemption". "Today, the Supreme Court applied bacon grease to the slippery slope of states taxing and regulating outside their borders", Andrew Moylan, Executive Vice President of the National Taxpayers Union Foundation and head of the organization's Interstate Commerce Initiative, said of the ruling.
Chief Justice John Roberts was in the minority. Lawmakers in the state, which has no income tax, passed a law created to directly challenge the physical presence rule.
Ross said without the pending state law sales-tax collection is hard to enforce because compliance is voluntary. "With the incredible evolution of technologies and the growth of internet sales, this Supreme Court ruling will help level the playing field between our Hoosier-based companies that operate retail stores and out-of-state companies that sell products and services online in our state".
The department will be analyzing the court's decision but was "pleased" with the ruling, according to a statement.
The court issued a ruling in the matter of South Dakota v. Wayfair, Inc., on Thursday. South Dakota, opens the door for similar taxes nationwide.
In 2016, South Dakota enacted legislation that was clearly unconstitutional by Quill standards.