U.S. Senators Heidi Heitkamp (D-ND), Mike Enzi (R-WY), Dick Durbin (D-IL), and Lamar Alexander (R-TN) submitted an amicus brief to the U.S. Supreme Court urging the Court to overturn a 25 year-old case determining whether states can require out-of-state businesses like online vendors to collect and remit state sales and use taxes. The members filed a brief asking the Court to reconsider the case last fall.
In 1991, when Heitkamp was North Dakota’s Tax Commissioner, the state of North Dakota attempted to make catalog retailers collect the sales and use tax the state and municipalities were already owed on sales. Heitkamp brought the case all the way to the Supreme Court, which in 1992 found in Quill Corp v. North Dakota that a business must have a physical presence in a state before it can be required to collect and remit state sales and use taxes. The Court also said that the U.S. Congress had the ultimate power to resolve the issue.
Since then, the sharp increase in internet sales has sparked renewed interest from state and local governments in leveling the playing field for brick-and-mortar businesses and closing a gaping loophole in our tax system. While the members have put forward a legislative solution in the Marketplace Fairness Act, Congress has not come to an agreement to fix the loophole.
“The Supreme Court should reverse its decision in Quill, which stacked the deck against brick and mortar businesses in our states and around the country,” the members said. “Online retailers should not have an unfair advantage over hardworking small businesses on Main Street. It’s time to level the playing field to protect small businesses and the jobs they support in our communities.”
Retailers without a physical presence have a price advantage over brick and mortar businesses of up to 8.5 percent in North Dakota, 9.75 percent in Tennessee, 11 percent in Illinois, and 6 percent in Wyoming simply because they cannot be required to collect those state taxes.
Click here to read the full text of the amicus brief.
The amicus brief – also called a “friend of the court” brief – is filed by outside parties and is used to share additional information and arguments for the Court to consider. The brief urges the Supreme Court to overturn Quill and decide in favor of the petitioner in South Dakota v Wayfair, Inc.
Last year, Enzi, Durbin, Alexander, and Heitkamp introduced the Marketplace Fairness Act of 2017 – legislation that would give states the right to require out-of-state businesses or online retailers to collect and remit the sales and use taxes that are already owed under current law. In 2013, the Senate passed the Marketplace Fairness Act by a bipartisan vote of 69-27, but the legislation did not become law.