By the end of arguments on Tuesday, it was not clear whether there were five votes to overrule the 1992 decision, Quill Corporation v. North Dakota, which said the Constitution bars states from collecting sales taxes from companies that do not have a substantial connection to the state.
Several justices expressed concerns about imposing crushing burdens on small businesses that sell goods on the internet and about making them liable for back taxes. Justice Sonia Sotomayor said the case before the court, South Dakota v. Wayfair, No. 17-494, raised “a host of questions” and “a whole new set of difficulties.”
Sounding almost plaintive, she added that Congress, rather than the Supreme Court, was the right forum in which to settle the matter.
“Is there anything we can do to give Congress a signal that it should act more affirmatively in this area?” Justice Sotomayor asked.
To which the Chief Justice responded, possibly wryly,
…Chief Justice John G. Roberts Jr. said that “it would be very strange for us to tell Congress it ought to do something in any particular area.”
Read the story for a bit of the give-and-take, a good account of past court statements, and the current politics and law on remote sales. Also, see our earlier post for some Washington state implications.
At Route Fifty, Bill Lucia reports the musings of one member of the court.
Notably, Justice Stephen Breyer sounded conflicted over how to best tackle the case.
“When I read your briefs, I thought ‘absolutely right,’” he said as South Dakota Attorney General Marty Jackley presented his argument.
“And then I read through the other briefs, and I thought ‘absolutely right,’” Breyer added, according to a transcript of the court proceedings. “And you cannot both be absolutely right.”
A tea-leaf reading analyst says,
Lisa Soronen, executive director of the State and Local Legal Center, a group that assists state and local governments with Supreme Court litigation, said in an email that Breyer’s uncertain position would probably not work in favor of discarding the Quill standard.
Stateline also notes the lack of a clear signal.
The justices seemed split on the issue. Several of the justices questioned the online retailers’ central argument against the South Dakota law: that collecting and sending in the taxes from the more than 9,000 jurisdictions that impose them would be burdensome and too complicated, especially for small sellers.
But others supported the businesses, and Chief Justice John Roberts suggested that the “problem has peaked” since Amazon, the biggest online retailer, already collects sales taxes, and that the problem may correct itself further over time.
A decision – one with substantial long-term consequences – is expected in June.