Supreme Court to hear case focused on online sales tax

Supreme Court to hear case focused on online sales tax

Some of the text from the landmark decision is inscribed on a wall at Avalara's Seattle HQ.

The U.S. Supreme Court will hear a case this week that will determine, to some degree, what you pay for things purchased online.

While online retailers are fighting sales tax collection because the lower total cost makes their products more appealing, states are mounting a relentless assault on the Quill decision.

The Supreme Court has addressed this issue over the years, eventually ruling that merchants with a physical presence in a state must collect that state's sales tax when selling to a resident of the state. Wayfair added this: It already collects taxes on 80 percent of its sales, a figure that will grow as it expands its warehouse network. However, NBC News notes that customers making online purchases from states that don't require sales tax collection are exempt from it. Tuesday's arguments may change this.

The Supremes are scheduled to discuss a tax dispute pitting South Dakota against Wayfair and codefendants and Newegg. This case could upend the long-standing ruling, instead installing a minimum sales threshold in a state as the defacto benchmark for collecting sales tax there. The law directly challenged the Quill decision, declaring an "urgent need for the Supreme Court of the United States to reconsider" the physical presence precedent. It affirmed a ruling made in 1967.

Sellers who want the court to keep the current rule say free or cheap software touted as a cure for the challenges of tax collection isn't accurate. The court reasoned that the volume of mail-order business was minor compared to in-store sales and that catalog companies would face too big a burden in having to figure out the correct sales tax, given widely different rates around the company. "State and local interests could also diverge where the pass-through of sales tax revenues is subject to state discretion". South Dakota's governor has said the state loses out on an estimated $50 million a year in sales tax that doesn't get collected by out-of-state sellers.

Should the court decide in favor of South Dakota, a number of scenarios are possible. "A retailer today can transact a significant amount of business in a state without ever being physically present in the state". They could also do something in between, granting the states more authority while imposing a number of restrictions.

At issue: a South Dakota law that essentially changes the physical presence threshold to a company's economic presence.

In a court filing supporting South Dakota, more than 40 states said the retroactivity concern is overblown.

"If Quill is overruled, the states will have no incentive to seek compromise federal legislation", according to the retailers' brief. The court reaffirmed that ruling in 1992. In addition, they said, the court can write a ruling that "applies prospectively only for all retailers and taxpayers".

Related Articles

  • $0.30 EPS Expected for Corning Inc. (GLW) This Quarter

    Choate Investment Advisors decreased Teradata Corp (NYSE:TDC) stake by 930 shares to 5,281 valued at $203.11 million in 2017Q4. Corning Incorporated (NYSE: GLW) stock jumped $0.07 higher during the regular trading session on Wednesday, hitting $27.41.

    EPS for IAMGOLD Corporation (IMG) Expected At $0.01 as of May, 8

    Whereas, in last 21 trading days (one month) was surged 13.65% and plunged in last 63 trading days (quarter) of -3.63%. Beta is important because it measures the risk of an investment that can not be reduced by diversification.

    Diamondrock Hospitality Company (DRH): Stock in Limelight

    Company has conspicuous measure of stock oscillations; average true range may be heating up this temperature with value of 0.25. It dropped, as 12 investors sold DRH shares while 75 reduced holdings. 24 funds amassed positions and 75 increased positions.
  • Zillow Group (Z) Given a $63.00 Price Target at KeyCorp

    The Average Directional Index or ADX is a technical analysis indicator used to describe if a market is trending or not trending. Schwab Charles Investment Management Inc. increased its position in shares of Zillow Group by 6.3% during the third quarter.
    Facebook admits data failings as chiefs face questions from TDs

    Facebook admits data failings as chiefs face questions from TDs

    Summers, director of innovation, entrepreneurship and engagement at the University of Maryland's College of Information Studies. People should log in to Facebook to find out what it's "capturing" about them, he said.
    Adidas: We'll sign Kaepernick if an National Football League  team signs him

    Adidas: We'll sign Kaepernick if an National Football League team signs him

    Of course, there's nothing stopping Adidas from offering Kaepernick an endorsement deal now, regardless of whether he's in the NFL.
  • Asia shares mixed, oil prices down amid Syria fallout

    Asia shares mixed, oil prices down amid Syria fallout

    Oil prices slipped with Brent crude futures off 66 cents at $71.92 a barrel, while USA crude fell 56 cents to $66.83 a barrel. EMini futures for the S&P 500 sprang 0.6 percent higher in early trade, while Japan's Nikkei added 0.3 percent.

    Weekly Tupperware Brands Corporation (NYSE:TUP) Ratings

    On Tuesday, April 10 the stock of Tupperware Brands Corporation (NYSE:TUP) has "Underperform" rating given by Bank of America . Also, Director Catherine Ann Bertini sold 1,729 shares of Tupperware Brands stock in a transaction on Wednesday, March 8th.
    Thoughts on the first weekend of the National Basketball Association  playoffs

    Thoughts on the first weekend of the National Basketball Association playoffs

    For a Cleveland team that doesn't play with enough energy and effort, Osman provides both - and should be playing over Green. Portland's legendary home court advantage should make sure the Moda Center is loud, but New Orleans has a fighting chance.
  • Cognizant Technology Solutions Corp (CTSH) Lowered to "Hold" at Vetr Inc

    Schroder Invest Mngmt Group Incorporated holds 0.02% of its portfolio in Ralph Lauren Corporation (NYSE:RL) for 106,495 shares. The stock of Archer-Daniels-Midland Company (NYSE:ADM) has "Neutral" rating given on Thursday, August 31 by Credit Suisse.
    Manchester City Are Premier League Champions!

    Manchester City Are Premier League Champions!

    Despite last week's incredible come-from-behind victory, United are still expected to miss out on the title to their city rivals. Champions Manchester City have set their sights on rewriting the record books after clinching the Premier League title.

    Elkfork Partners LLC Acquires Shares of 169290 Duke Realty Co. (NYSE:DRE)

    The real estate investment trust reported $0.17 EPS for the quarter, missing analysts' consensus estimates of $0.30 by ($0.13). It increased, as 22 investors sold SSNI shares while 24 reduced holdings. 160 funds opened positions while 346 raised stakes.