It’s been a long week in Washington. The Trump administration lost another senior aide, refuted (and accidentally confirmed) infidelity accusations from a porn star, and doubled down on a potential trade war, among other things. So it’s understandable if you missed the news about the administration formalizing their support for South Dakota’s effort to charge sales tax on online transactions.
As reported by CNBC, in 2016, South Dakota “enacted a law requiring out-of-state retailers to collect sales tax” and then subsequently sued four outlets. Three contested the law, and in 2017, the South Dakota Supreme Court ruled against the state “citing [a] 1992 precedent.” The state then requested a SCOTUS hearing, which they’ll have in April.
Now, Trump’s DOJ has weighed in. “In a legal brief filed on Monday with the Supreme Court, the U.S. Department of Justice said the 1992 ruling may have to be overruled because it no longer fits with the rise of modern-day e-commerce in which online retailers can replicate the shopping experience of a physical store even where it has no physical property.”
(This could be dangerous territory for the administration: if they publicly acknowledge that we no longer live in the past their entire agenda could turn into a pumpkin. But I digress.)
“A physical-presence requirement … bears no logical relationship to current economic conditions,” Solicitor General Noel Francisco said in the brief, “and imposes intolerable burdens on the states ability to collect tax revenue they are lawfully owed.”
Hypocrisy around this crew using the phrase “lawfully owed” aside, the U.S. Government Accountability Office estimates that “states and municipalities could gain between $8 billion and $13 billion in annual revenue if they could require online sales tax.”
And while the story notes that some retailers — including Amazon — already collect sales tax, a large number of others do not, giving traditional retailers “an unfair advantage over brick-and-mortar competitors.” And helping online shoppers like us save lots of money.
You can read more about it at CNBC.