June 21, 2018
U.S. Supreme Court Issues Sales Tax Fairness Decision Retailers Have Been Waiting For
In big news out of Washington, D.C. this morning, the U.S. Supreme Court ruled in favor of a level sales tax playing field in South Dakota v. Wayfair. The case centered on a loophole in the law that allowed retailers without a physical presence in the state to avoid collecting and remitting state sales tax.

The Minnesota Retailers Association (MnRA) has long held the position that retail sales should be treated the same--whether in-store or online and regardless of the location of the retailer.

" It appears fairness is on a path to prevailing. Today's decision is a big moment for Minnesota retailers that have argued for sales tax fairness for years and years," said MnRA President Bruce Nustad in reaction to the news. " This is a great step in leveling the playing field and ensuring an online sale has the same tax treatment as an in-store sale."

"This issue has plagued retailers in towns across Minnesota as well across the country for years. Retailers welcome the opportunity to compete for customers on service, convenience and price, without a competitor having an unfair tax advantage, " added Nustad.

In 2013 MnRA worked with the Minnesota Legislature and Governor to ensure retailers with a physical presence in Minnesota were collecting sales tax on their online sales, and in anticipation of today's decision the Association last year worked on remote-seller language to cover third-party marketplace transactions beginning July 1, 2019 or when a favorable decision was delivered (as it was today) by the U.S. Supreme Court.

With today's ruling, MnRA will take the next steps of analyzing the decision and continuing to work with our elected officials as well as the Minnesota Department of Revenue.

MnRA thanks the countless number of retailers that have worked on this issue over the years, as well as our legislative partners at the state and federal level.

NRF Says Supreme Court Sales Tax Ruling Creates ‘Fair And Level Playing Field’ Between Online And Local Retailers
From the National Retail Federation, June 21, 2018

The National Retail Federation issued the following statement from President and CEO Matthew Shay in response to a U.S. Supreme Court ruling in South Dakota v. Wayfair allowing states to require online sellers to collect sales tax the same as local stores.

“Retailers have been waiting for this day for more than two decades. The retail industry is changing, and the Supreme Court has acted correctly in recognizing that it’s time for outdated sales tax policies to change as well. This ruling clears the way for a fair and level playing field where all retailers compete under the same sales tax rules whether they sell merchandise online, in-store or both.”

The court this morning upheld a 2016 South Dakota law that requires online merchants with more than $100,000 in annual sales to state residents or 200 transactions with state residents to collect sales tax.

NRF argued in a friend-of-the-court brief last year that the court’s 1992 Quill Corp. v. North Dakota decision was outdated and that sales tax collection is no longer the burden it might once have been due to changes in technology. In the brief, NRF cited a wide variety of software available to automatically collect the sales tax owed, much of its available free or at low cost.

NRF and other retail groups said in a second brief filed this year that lack of uniform collection is “inflicting extreme harm and unfairness” on local retailers by “distorting the retail market in favor of absentee ecommerce.”

The court agreed, noting “It is unfair and unjust to those competitors, both local and out of State, who must remit the tax; to the consumers who pay the tax; and to the States that seek fair enforcement of the sales tax, a tax many States for many years have considered an indispensable source for raising revenue.”

NRF has been a leading voice for equal sales tax rules for years, saying that Quill gave online sellers an unfair price advantage over local merchants.
WayFair Decision a Win for Retailers, Free Markets and Fair Play
From the Retail Industry Leaders Association, June 21, 2018

The Retail Industry Leaders Association (RILA), the trade association for America’s largest and most innovative retailers, released a statement 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 amicus strategy at both the cert and merit stages of the case. 
 
“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," said Deborah White, General Counsel for the Retail Industry Leaders Association and President of the Retail Litigation Center. “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. 

“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,” said White. “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 to work expeditiously on legislative and regulatory solutions to close the online loophole in their states. 

“States had this authority taken from them decades ago,” said White. “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. 

"Today’s ruling will give every retailer the opportunity to compete on a level playing field without government's thumb on the scale—that’s a win for all those who believe in free markets,” said White. “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.”