ICSC, along with the National Association of REALTORS, the Real Estate Roundtable, Nareit, NAIOP, the National Multifamily Housing Council and others, has filed an amicus brief in South Dakota v. Wayfair, et al, the landmark case regarding collection of state sales taxes that will be argued before the Supreme Court this spring.
The brief outlines the argument for leveling the playing field between brick-and-mortar retailers, who are forced to collect sales tax ranging from 3 to 10%, and online retailers, who are often shielded from the same tax obligation.
The brief also examines the cascading effects caused by a lack of sales tax fairness:
“Quill’s distorting effects reach far beyond brick-and-mortar stores themselves. First, the loss of physical stores, many of which are integral to the social fabric of their communities, increases unemployment and creates a sense of dislocation among community residents. Second, the decline in the retail sector reduces the value of retail real estate, discourages further development of retail properties, and impedes innovation in the retail sector. Third, the lost revenue from sales, property, and income taxes threatens the ability of state and local governments to provide much-needed public services, including those that benefit online retailers. Finally, although the decline in brick-and-mortar retail affects all communities, the impact on the nation’s rural areas is particularly acute: As local grocery stores, pharmacies, and shops disappear, rural communities struggle to maintain access to basic goods and to replace important sources of off-farm income.”
The current case before the court is centered on a 2016 South Dakota law that required out-of-state sellers exceeding $100,000 in sales or with 200 or more separate sales transactions into South Dakota to collect and remit sales taxes to the state. The plaintiff is challenging the existing requirement that only retailers with a physical presence in a state — in the form of stores or warehouses — can be required to pay state sales taxes, as upheld in the previous Supreme Court ruling, in Quill Corp. v. North Dakota, from 1992.
“We feel our argument is important, that there actually has been harm because of the Quill decision,” said Jennifer Platt, ICSC vice president of federal operations.
Oral arguments before the Supreme Court are scheduled for April 17, 2018 and a ruling is expected in late June.
Stephanie Lockwood
Senior Director, Government Relations & Advocacy
