Retailers nationwide will be celebrating today following a blockbuster U.S. Supreme Court ruling this morning giving every state in the union the right to collect sales taxes from internet companies regardless of whether they have a physical brick and mortar presence in the state. It was a long fought battle, and first to respond was the trade association Retail Industry Leaders Association who declared that the decision by the court “Will give every retailer the opportunity to compete on a level playing field without the government’s thumb on the scale,” and called the 5-to-4 decision, “A win for all those who believe in free markets.”
The Retail Industry Leaders Association (RILA), the trade association for America’s largest and most innovative retailers, is celebrating today’s decision in South Dakota v. Wayfair, a case that focused on a decades-old loophole that allowed online-only retailers to skirt collecting and remitting state sales tax. RILA and its sister organization, the Retail Litigation Center (RLC), worked on a years-long strategy to support the case in South Dakota and build a robust friend of the court strategy at both the cert and merit stages of the case.
Deborah White is General Counsel for the Retail Industry Leaders Association and also President of the Retail Litigation Center. She says, “Today’s decision culminates years of tireless work by the retail community to reverse a pre-Internet era rule that distorts free markets and puts local brick and mortar stores at a competitive disadvantage with their online-only counterparts.” White adds, “This was the right case and the right time for the Court to act, and we couldn’t be more pleased with the outcome.”
Addressing the suggestion that new collection requirements would be a burden to start-ups and small online retailers, White pointed to the dramatic changes in network computing and e-commerce in the last quarter century, saying, “The Court clearly didn’t buy the argument made by the Respondents in this case that remote sales tax compliance represented the same burden today that it did in 1992.” In fact, she adds, “Through its decision, the Court has acknowledged that the same computing sophistication that has fueled exponential growth in e-commerce has also dramatically simplified remote sales tax collection.”
Given the Court’s ruling, White expects the forty-five states with a sales tax, including Michigan, to work expeditiously on legislative and regulatory solutions to close the online loophole in their states.
White argues, “States had this authority taken from them decades ago.” She predicts, “Most will work quickly and judiciously to reclaim their authority and create a level playing field for all retailers selling to customers in their states.”
On the impact of the decision for the retail industry and its customers, White said today’s decision would ultimately be a win for both, saying, “For the consumer, this means an increasing array of options both in-store and online, with competition for their business based on price, service, selection and value—not special tax treatment.”
The Retail Industry Leaders Association is the trade association of the world’s largest and most innovative retail companies. Its members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs, and more than 100,000 stores, manufacturing facilities, and distribution centers domestically and abroad.
