Earlier this month, the U.S. Supreme Court agreed to hear a case brought by the state of South Dakota that calls into question the 1992 Quill v. North Dakota decision, which ruled that online retailers that do not have a physical presence in a state do not have to collect sales tax on purchases made over the internet.
South Dakota passed a law in 2016 requiring out-of-state retailers to collect and hand over sales tax on these purchases, which was quickly shot down by the highest state court. South Dakota’s attorney general then filed a petition with the U.S. Supreme Court, requesting that the nine justices review the state court’s decision and hence reexamine the national precedent set by the Quill case.
The Auto Care Association had joined nine other trade associations in signing an amicus brief supporting the South Dakota attorney general’s petition. The brief echoed the petitioner’s request that the court overturn the Quill decision, citing the real-world competitive impacts on brick-and-mortar businesses. The practice of “showrooming,” whereby consumers check out products in stores yet purchase over the internet to avoid the higher price that comes with added sales tax, was highlighted as an ongoing concern. The brief further cited the significant investment in employee training and showroom displays made by retailers that will often lose the sale when consumers decide to purchase the product online.
In addition to support from various trade groups, 35 states endorsed the petition, urging the high court to take up the appeal. A decision is expected before the end of June.