Policy Issues

INTERNET SALES TAXATION

ISSUE

In June 2018, in South Dakota v. Wayfair, the Supreme Court overturned its prior case law and upheld a South Dakota law that imposes sales tax collection requirements even if the seller lacks a physical presence in the State.  The decision marks a monumental step forward in the effort to create a level economic playing field between internet retailers and Main Street stores.   

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Position

The Roundtable will work with lawmakers and outside stakeholders to preserve and sustain the Supreme Court’s recent Wayfair decision, which promotes a level economic playing field by allowing States to impose sales tax collection requirements on internet retailers.

Background

In June 2018, in South Dakota v. Wayfair, the Supreme Court overturned its prior case law and upheld a South Dakota law that imposes sales tax collection requirements even if the seller lacks a physical presence in the State.  The decision allows States to collect sales taxes from Internet retailers, just as they do from physical stores—a principle The Roundtable previously pursued through Marketplace Fairness legislation.

The Roundtable, along with other real estate organizations, such as the International Council of Shopping Centers, submitted an amicus brief urging the Court to grant certiorari in the Wayfair case.  In March 2018, The Roundtable joined the same groups in filing an amicus brief in support of the South Dakota law.

A longstanding effort to create a uniform, national framework for state collection of taxes on internet transactions was able to pass the Senate in 2013 but consistently hit opposition from key lawmakers, such as House Judiciary Committee Chairman Bob Goodlatte (R-VA). 

In addition to removing a source of tax discrimination against Main Street stores, the Wayfair decision will help ensure States and localities can finance critical public services. 

Opponents of the decision have introduced legislation to delay, limit, and override Wayfair.  The Roundtable has opposed these bills and is working with stakeholders to ensure a successful and fair implementation of Wayfair by States.

Going forward, opponents of the decision may continue to seek legislation that would override Wayfair.  In addition, both sides may eventually seek federal legislation in order to avoid overlapping State laws and potential double taxation, and to provide tailored rules for small businesses. 

The Roundtable will work with lawmakers and outside stakeholders to provide a level playing field for all market participants and ensure an adequate revenue base for critical public services by preserving the Supreme Court’s recent Wayfair decision.

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