Lawmakers, conservative groups urge Supreme Court to keep online sales tax limits

Lawmakers, conservative groups urge Supreme Court to keep online sales tax limits
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A bipartisan group of lawmakers, conservative groups and online businesses are urging the Supreme Court to keep in place limits on states' ability to require online retailers to collect their sales taxes.

Modifying the limits "would cause substantial damage to one of the most important and vibrant segments of the national economy," online auction giant eBay said in a friend-of-the-court brief filed Wednesday.

The Supreme Court is scheduled to hear oral arguments later this month in a case, South Dakota v. Wayfair, about the online sales issue.


The court ruled in 1992 that states could only require businesses to collect their sales taxes on remote sales if the business had a physical presence in their state. The ruling also said that Congress has the ultimate power on the issue.

South Dakota, seeking to get the court to revisit that ruling, enacted a law in 2016 that requires certain out-of-state online retailers to collect their sales taxes.

But in friend-of-the-court briefs filed this week, a number of stakeholders argued that the 1992 ruling should be upheld. Briefs supporting Wayfair were due Wednesday.

A group of lawmakers that includes House Judiciary Committee Chairman Bob GoodlatteRobert (Bob) William GoodlatteUSCIS chief Cuccinelli blames Paul Ryan for immigration inaction Immigrant advocacy groups shouldn't be opposing Trump's raids Top Republican releases full transcript of Bruce Ohr interview MORE (R-Va.) and Senate Finance Committee ranking member Ron WydenRonald (Ron) Lee WydenThe Hill's Morning Report — Sponsored by AdvaMed — House panel delays impeachment vote until Friday Senators zero in on shadowy court at center of IG report Trump administration approves Medicaid work requirements in South Carolina MORE (D-Ore.) said in their brief that "it is for Congress — not the Solicitor General, this Court, or the States — to decide the best interstate taxation scheme for Internet sales." 

A coalition of conservative organizations — including the National Taxpayers Union Foundation, Americans for Prosperity and FreedomWorks — argued that it's important for the Supreme Court to make clear that states don't have unlimited ability to regulate outside of their borders.


"As an original matter, there is no valid reason to allow a state to impose regulatory tax-collection responsibilities on an out-of-state retailer without either a physical presence or a voice in the jurisdiction," wrote the groups, which are represented by former Solicitor General Paul Clement.

Others that filed briefs urging the court to keep the physical presence standard include Etsy, the Cato Institute, and New Hampshire and Montana, both of which don't have sales taxes.

Those who support South Dakota's law argue that states should be able to require businesses to collect their sales taxes if they have an economic presence in the state, even if they don't have a physical presence.

Stakeholders supporting South Dakota were required to file briefs by early March. Those who did include the Trump administration, a bipartisan group of Senators that includes Lamar AlexanderAndrew (Lamar) Lamar AlexanderTrump scramble to rack up accomplishments gives conservatives heartburn Overnight Health Care — Presented by That's Medicaid — Turf war derails push on surprise medical bills | Bill would tax e-cigarettes to pay for anti-vaping campaign | .5M ad blitz backs vulnerable Dems on drug prices Turf war derails bipartisan push on surprise medical bills MORE (R-Tenn.) and Heidi HeitkampMary (Heidi) Kathryn HeitkampPro-trade group launches media buy as Trump and Democrats near deal on new NAFTA The Hill's Morning Report — Biden steadies in third debate as top tier remains the same Trump wins 60 percent approval in rural areas of key states MORE (D-N.D.), retail groups and groups representing state and local governments.