Washington, January 12, 2018 – The US Supreme Court on January 12th agreed to hear the South Dakota v. Wayfair et. al. case concerning the 1992 Quill v. North Dakota precedent. “The Court’s decision to accept review shows that it realizes the ongoing importance of this issue,” said Hamilton Davison, President of the American Catalog Mailers Association, Inc. “We are confident the Court will protect the free flow of interstate commerce from overreaching state sales tax laws.”
With another trade association, NetChoice, the ACMA instigated a separate lawsuit also against South Dakota, challenging the illegal expansion of how physical presence is defined.
“We look forward to showing the Court to that circumstances surrounding the Quill decision have not changed at all and that the decision should be affirmed,” Davison said. In 1992 marketers, had a variety of media alternatives and some 6,000 different taxing jurisdictions. “The ‘crazy quilt’ of differing tax laws, product definitions, and rates was determined by the Court to represent a de facto barrier to interstate commerce, as prohibited by the U.S. Constitution. Today, with more than 13,000 different jurisdictions and the addition of sales tax holidays the situation is even more complex, despite the maturation of the Internet. Moreover, regardless of how the Court rules, this problem must still be addressed in Congress.”
Some point to the advancement in software and processing capability as justification for why remote sellers can now overcome this complexity, but the ACMA disagrees. “Small- and medium-sized companies would be hit particularly hard were Quill to be overturned,” Davison said. ”There is a plethora of additional costs beyond having lookup software that must then be integrated into legacy systems and maintained.” (ACMA published a cost of compliance study outlining those costs found here.)
Forcing remote sellers to collect sales taxes in every jurisdiction is like requiring brick and mortar retailers to check the driver’s license of every customer in their store, then applying the correct local sales tax, with the proper and differing product definitions, and remit to the proper jurisdiction using the proper paperwork.
“We are confident that when the Court separates the rhetoric from the reality of forcing sales tax collection burdens on remote sellers,” Davison said, “it will again decide that companies without a physical presence in a jurisdiction — and without any political standing, connections or redress — should not be subject to the legislative impositions of lawmakers outside their home jurisdictions.”