Should online companies be required to collect state sales taxes on products sold over the Internet?
To be more precise, should an online company with no physical presence in a state be required to collect state sales tax on products sold to consumers in that state?
For 26 years, the answer has been no, following a U.S. Supreme Court ruling involving a North Dakota case, the 1992 North Dakota vs. Quill Corporation decision..
Tomorrow, the issue is again before the high court, this time in the case of South Dakota vs. Wayfair
At issue is billions of dollars in uncollected revenue states claim they have lost from online sales to customers within their borders.
Local businesses argue they are at a competitive disadvantage because they have to collect sales tax while their online rivals do not, essentially making the locally sold products more expensive.
Online companies say they shouldn’t be required to collect state taxes mainly because it would be a costly and complex process process, given how similar products can be taxed differently in various states.
The Supreme Court will hear one-hour oral arguments in the case Tuesday at around 10:00 a.m. CDT.
More details are available at the U.S. Supreme Court Web site: https://www.supremecourt.gov/.
Information on the North Dakota vs. Quill case is available at: https://www.law.cornell.edu/supct/html/91-0194.ZO.html.