US Supreme Court Agrees to Hear Case Regarding Online Sales Tax Collection

In what is a very welcome development, the U.S. Supreme Court recently agreed to hear oral arguments on South Dakota v Wayfair. This case for whether states should be able to collect taxes on cross border internet sales could potentially overturn the 1992 case Quill v. North Dakota. Under Quill, a state can only collect sales tax on a transaction if the seller has a physical presence within the state. In 2016, South Dakota passed legislation, Senate Bill 106, that requires out-of-state sellers to collect sales tax if they had annual sales in the state of more than $100,000 or more than 200 separate in-state transactions. As a clear violation of the court’s precedent in Quill v. North Dakota, the law was passed to invite a legal challenge.

There have been other lawsuits and legislation initiated to specifically involve the U.S. Supreme Court in order to settle this issue for over two decades. This should cause the court to look at the physical presence requirement for sales tax, which is the major point in Quill. This issue has become much more difficult due to changes in technology and sales practices. Remember, that the internet and digital technology was very new at the time of the Quill decision. Quill sold office supplies through a mail order catalog. Our tax system of collecting sales taxes is still based on that model. The difference being that technology has increased this type of sale exponentially.

Local retailers also claim the system puts them at a severe disadvantage against online retailers, by effectively incentivizing customers to bypass their local store and order the same product online thereby avoiding the sales tax. The current precedent deprives states and localities of literally billions of dollars. Ohio law already requires taxpayers to pay the state the proper amount of sales tax if it is not collected at the time of purchase. However, estimates are that many taxpayers fail to comply with this requirement, possibly costing the state Ohio millions in taxes due.

It is believed that the court will issue its opinion during the current term. Some believe that the U.S. Supreme Court is hearing Wayfair specifically to overrule the Quill decision. Others believe that the court may rule that states which have passed streamlined sales tax legislation may begin collecting sales taxes immediately. There are currently 24 such states, including Ohio. The impact of this case cannot be overstated as it holds the possibility to reform commerce as we’ve come to know it in the internet age.

So, stay tuned, the future certainly holds change, and we will continue to track it. Will a decision by the U.S. Supreme Court fix the issue, or muddy the waters further? We’ll all be watching as government continues its attempts at keeping up with technology.

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  234. Between me and my husband we’ve owned more MP3 players over the years than I can count, including Sansas, iRivers, iPods (classic & touch), the Ibiza Rhapsody, etc. But, the last few years I’ve settled down to one line of players. Why? Because I was happy to discover how well-designed and fun to use the underappreciated (and widely mocked) Zunes are.

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  239. Hands down, Apple’s app store wins by a mile. It’s a huge selection of all sorts of apps vs a rather sad selection of a handful for Zune. Microsoft has plans, especially in the realm of games, but I’m not sure I’d want to bet on the future if this aspect is important to you. The iPod is a much better choice in that case.

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  241. This is getting a bit more subjective, but I much prefer the Zune Marketplace. The interface is colorful, has more flair, and some cool features like ‘Mixview’ that let you quickly see related albums, songs, or other users related to what you’re listening to. Clicking on one of those will center on that item, and another set of “neighbors” will come into view, allowing you to navigate around exploring by similar artists, songs, or users. Speaking of users, the Zune “Social” is also great fun, letting you find others with shared tastes and becoming friends with them. You then can listen to a playlist created based on an amalgamation of what all your friends are listening to, which is also enjoyable. Those concerned with privacy will be relieved to know you can prevent the public from seeing your personal listening habits if you so choose.

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