Multi-State – White House Signals Commitment To Push For Expanded Online Sales Tax Collections

The Hill
by Naomi Jagoda
March 20, 2018

The Trump administration is asking the Supreme Court to let it participate in oral arguments in an online sales tax case being heard next month, signaling the White House’s commitment to pushing for more state authority to collect sales taxes on internet purchases.

“Because the United States’ participation in oral argument is likely to be of material assistance to the Court, the United States respectfully requests that it be granted ten minutes of petitioner’s allotted argument time,” Solicitor General Noel Francisco said in a motion filed Monday.

The case before the court, South Dakota v. Wayfair, centers on a South Dakota law that requires certain out-of-state online retailers to collect the state’s sales taxes.

In 1992, the Supreme Court ruled that states can only require businesses to collect sales taxes on remote purchases if the retailer has a physical presence in the state. But South Dakota, other state and local governments and retail groups are hoping that the court allows states to collect sales taxes on businesses with economic presences in the states, even if they have no physical presence. Some conservatives and e-commerce groups, meanwhile, want the 1992 ruling to stand.

The Trump administration said in its motion that it does not think that the 1992 ruling applies to internet retailers, but that if the Supreme Court thinks it does, justices should overturn the ruling because it’s “poorly reasoned and unworkable in the age of modern e-commerce.”

The administration said that South Dakota has agreed to give 10 minutes of its oral argument time to the U.S. government.

The motion to participate in oral arguments is the latest example of the administration speaking up on the online sales tax issue.

Treasury Secretary Steven Mnuchin said at a hearing last month that President Trump “feels strongly that the taxes should be collected.”

A group of lawmakers, led by Rep. Kristi Noem (R-S.D.), has been pushing for Congress to act on the issue before the Supreme Court rules. However, they were likely unsuccessful in getting their online sales tax bill included in the omnibus spending package Congress is expected to take up this week.

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