TOPEKA – (March 5, 2018) – Kansas Attorney General Derek Schmidt today asked the U.S. Supreme Court to reverse a 25-year-old ruling that prevents Kansas and other states from collecting sales tax from out-of-state online retailers unless the seller has a physical presence in the state.
Schmidt and the attorneys general of 40 other states, two territories and the District of Columbia today filed an amicus brief with the U.S. Supreme Court arguing that the physical-presence rule gives online retailers an unfair competitive advantage over in-state brick and mortar stores. The Colorado-led brief urges the Supreme Court to overrule the 1992 Quill v. North Dakota decision that adopted the physical-presence rule.
“[W]ith the exponential growth of ecommerce, Quill’s outdated physical-presence rule throws a wrench into the States’ tax machinery,” the attorneys general wrote in their brief. “Remote online retailers, claiming Quill’s protection, largely refuse to collect the sales tax at the point of sale, even though the consumer undisputedly owes the tax. Some remote online retailers even advertise—falsely—that their online sales are ‘tax free,’ … thus compounding the problem by placing local, physically present retailers at an apparent price disadvantage.”
The case is State of South Dakota v. Wayfair, Inc. Oral argument is scheduled for April 17. A copy of the brief is available at http://bit.ly/2FpG0DD.