The National Sporting Goods Association (NSGA) welcomed the U.S. Supreme Court’s decision to hear a South Dakota case on whether online sellers can be required to collect sales tax the same as local stores.
South Dakota is asking the justices to overturn a state Supreme Court ruling against a 2016 law requiring online merchants with more than $100,000 in sales or 200 transactions with South Dakota residents to collect sales tax. The South Dakota case comes two years after Justice Anthony Kennedy said that the U.S. Supreme Court made a mistake in Quill Corp. v. North Dakota by relying on an outdated precedent on physical presence. Kennedy invited opponents of the decision to bring a new case that would allow the Court to correct its mistake. NSGA filed an Amicus Curiae (Friends of the Court) brief in November, asking the Supreme Court to hear South Dakota’s case, which would give the Court the opportunity that Justice Kennedy is seeking. Similar briefs were filed by government, business and related organizations, urging the Supreme Court to hear the case. Each brief focused on a different critical aspect of the appeal and how the current situation is detrimental to traditional retailers.
“This is an encouraging step toward fairness in how sales taxes are collected by all retailers, whether or not they have a physical store,” NSGA President & CEO Matt Carlson said. “That said, there is still an opportunity for a legislative solution.”
NSGA supports H.R. 2193, the Remote Transactions Parity Act and S. 976, the Marketplace Fairness Act, which would level the playing field by permitting all states that have a sales tax to require out-of-state Internet sellers to collect state sales tax. These are not new taxes, but rather taxes already on the books that go uncollected in large part on Internet sales. It is estimated that nearly $30 billion in sales taxes go uncollected nationwide due to this loophole.
