UPDATE 1-U.S. Supreme Court struggles with e-commerce sales tax case

From Reuters - April 17, 2018

WASHINGTON (Reuters) - U.S. Supreme Court justices on Tuesday appeared uncertain whether to let states force out-of-state online retailers to collect sales taxes on purchases in a fight potentially worth billions of dollars pitting South Dakota against e-commerce businesses.

South Dakota is asking the nine justices to overturn a 1992 Supreme Court precedent that states cannot require retailers to collect state sales taxes unless the businesses have a physical presence in the state. But several justices said that the U.S. Congress would be best placed to pass a law addressing the issue on a national basis and raised concerns about the various states enacting wildly different laws.

South Dakota, appealing a lower court decision that favored Wayfair Inc (W.N), Inc (OSTK.O) and Newegg Inc, is being supported by President Donald Trumps administration.

A ruling favoring South Dakota could eventually lead toonline customers paying more for many purchases.

Such a ruling could help small brick-and-mortar retailers compete with online rivals while delivering up to $18 billion into the coffers of the affected states, according to a 2017 federal report. The justices are due to decide the case by the end of June.

South Dakota depends more than most states on sales taxes because it is one of nine that do not have a state income tax. South Dakota projects its revenue losses because of online sales that do not collect state taxes at around $50 million annually, while its opponents in the case estimate it as less than half that figure.


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