New York’s retailers eagerly watch today as US Supreme Court hears on-line sales tax arguments

ALBANY, NY – Brick-and-mortar retailers of every size and sort throughout New York look today to the Supreme Court of the United States as it hears oral arguments in South Dakota v. Wayfair, Inc., revisiting the Court’s 1992 Quill decision that created the sales tax advantage that on-line retailers have long held over Main Street merchants.

Retail Council of New York State President and CEO Ted Potrikus said the case rekindles the national discussion on sales tax policy and collection in the digital age.

“We’re well past the day when the physical-presence test applies in retail,” he said. “On-line juggernauts that today command billions in annual sales rely on Quill to give them a massive tax advantage over brick-and-mortar retailers. These corporations do not need the shelter the Court upheld for mail-order catalogs more than 25 years ago.”

He said New York’s retailers long ago gave up waiting for Congress to approve a “national solution” to the unfairly-tilted sales tax playing field.

“New York was first-out-of-the-box with a click-through nexus sales tax mechanism in 2008,” he said. “Back then, naysayers argued we would kill e-commerce. They were wrong. They said we need a national solution. That is enormously unlikely to happen.”

“Now they say there are too many anomalies among the thousands of sales tax jurisdictions and that it’s too hard,” he said. “And yet the same highly advanced technology they use to track consumer tastes and preferences – not to mention calculate shipping fees on the millions of products of different sizes and weights that they ship to every Zip Code in the nation – also enables them to collect and remit sales taxes as a routine matter.”

Mr. Potrikus said that a SCOTUS decision in favor of South Dakota later this year would open the door to states looking to close sales tax collection loopholes created by Quill.

“The ‘marketplace’ proposal rejected from this year’s budget proposal remains an ideal way to protect small businesses selling through marketplace platforms from the actual collection requirements,” he said. “It also remains absurd that the big platforms so publicly opposing ‘marketplace’ say they don’t have the sophistication to figure out the sales tax in one Zip Code versus another.”

“We hope today’s arguments lead to a decision favorable to brick-and-mortar retailers in June,” he said. “We look forward to revisiting discussions soon about how to take what comes from the Supreme Court and help the brick-and-mortar merchants of New York State.”

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