Published: Sat, January 13, 2018
World | By Paul Elliott

Can states collect sales taxes on all purchases?

Can states collect sales taxes on all purchases?

The clear signal from the justices is that they may be ready to reverse themselves and demand that online retailers collect and remit sales taxes, even in states where they have no physical presence.

In 1992, when home shopping was dominated by mail-order catalogs, the high court ruled a state may require out-of-state companies to collect sales taxes only if the company had outlets or warehouses within the state.

Critics of the 1992 decision say it no longer fits a world where much of our commerce happens, at least in part, online. The Government Accountability Office estimated in November that requiring "remote sellers" to collect sales taxes would produce a lesser amount of $8 billion to $13 billion.

State lawyers were cheered two years ago when Justice Anthony M. Kennedy said the court should "reexamine" the 1992 decision in Quill Corp. v.

The Supreme Court's decision to weigh the state's appeal will further delay any redrawing efforts even after nearly seven years of litigation between state attorneys and voting and minority rights groups that challenged the maps. South Dakota, extended the "physical presence" rule but only for sales taxes on non-state sellers.

Part of the law created to assure a court test of the state's new tax gave the state permission to sue out-of-state retailers who failed to collect and pay. "The action throughout the nation is extensive and complex", the state's appeal said. She thinks South Dakota's challenge to the law, South Dakota v. Wayfair, could be the impetus for change. The fact that the Court is reconsidering the old doctrine does not necessarily mean it will overrule it, but Justice Kennedy usually has a strong influence on outcomes and the constitutional doctrine underlying the Quill precedent has strong critics among some of the more conservative Justices. That case, along with the one from Texas, is likely to be heard this spring and decided by June.

The grant of review of the South Dakota case on Friday was among similar grants on ten other cases.

A barrage of court rulings past year - including the two redistricting rulings handed down last August - have forced Texas leaders to confront whether they strayed too far in enacting voting laws found to have disproportionately burdened people of color.

State GOP leaders have argued the maps were drawn to favor Republicans, not to disenfranchise minorities.

Texas Attorney General Ken Paxton appealed both orders to the U.S. Supreme Court, which granted the state's request to stay the rulings in September while it mulled Texas' appeal. The justices are also expected to weigh in on a lower court ruling that struck down North Carolina's congressional map as a partisan gerrymander, ordering a new map for the 2018 elections.

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