There’s a lot of cash at stake. The Government Accountability Office estimates that state and local governments could have collected up to $13 billion more in 2017 had they been allowed to require sales tax payments from online sellers, as notes. All but five states — Alaska, Delaware, Montana, New Hampshire and Oregon — impose sales taxes, meaning South Dakota v. Wayfair is a national issue.
South Dakota doesn’t have an income tax, so it’s particularly affected by the Quill decision. In August, the state said it had collected about $1.6 million since enacting the 2016 law and estimated it could be missing out on $50 million each year. Last year, the state faced a $33.7 million budget shortfall; South Dakota’s Governor Dennis Daugaard said most South Dakota employees won’t see a raise for the next two years, pointing to low sales tax revenue as a problem.
The #AmazonWashingtonPost, sometimes referred to as the guardian of Amazon not paying internet taxes (which they should) is FAKE NEWS!
As Bloomberg’s Spencer Soper, Matthew Townsend and Lynnley Browning wrote last August, Amazon used to rely on the Quill ruling but has taken steps in recent years to change that. In its relentless quest to find efficiencies, the company has built warehouses all over the country, meaning that it has a physical presence in many states and has to pay sales taxes anyway; last year the company began collecting sales taxes in all states that levy them. Amazon still, however, avoids charging shoppers sales tax when they buy products from one of its third-party vendors, which makes up a significant portion of its business.
But some legislators say that Quill is the thing that’s keeping them from acting. A group of lawmakers — Sens. Mike Enzi (R-WY), Heidi Heitkamp (D-ND), Dick Durbin (D-IL), and Lamar Alexander (R-TN), along with Reps. Kristi Noem (R-SD) and John Conyers (D-MI) — signed a brief asking the Supreme Court to hear South Dakota v. Wayfair and overturn Quill. They say that Congress has been unable to reach a consensus on a legislative solution and that the impasse is the result of “structural advantages and disadvantages created by the Quill decision.” In other words: If Quill goes away, they’ll be able to fix the underlying issues.
Amazon backs a nationwide approach instead of having to deal with taxing on a state-by-state basis, but other retailers aren’t so sure. Wayfair, Overstock, and Newegg are opposing South Dakota in its court fight, arguing that the burdens will fall primarily on small and medium-sized companies and asking instead for Congress to address the matter through legislation.