Sales Tax fairness

The National Sporting Goods Association (NSGA) applauded the United States Supreme Court’s decision that permits states to require out-of-state Internet sellers to collect and remit the sales taxes that are due.

On June 21, 2018, in a 5-4 ruling in South Dakota v. Wayfair, the court overturned a 1992 court precedent barring states from requiring businesses that have no physical presence in the state to collect their sales taxes.  Delivering the opinion of the court, Justice Anthony Kennedy said the physical presence rule in that previous case, Quill Corp. v. North Dakota, is unsound and incorrect.  “Between targeted advertising and instant access to most consumers via any Internet-enabled device, ‘a business may be present in a state in a meaningful way without’ that presence ‘being physical in the traditional sense of the term,’” he said.

South Dakota's 2016 law, which the court upheld, requires out-of-state online sellers to collect the state’s sales taxes if the companies have more than $100,000 in annual sales of products to South Dakota residents or more than 200 separate transactions for the delivery of goods and services to state residents.

This decision benefits brick-and-mortar retailers, who had been collecting sales taxes and removes the unfair price advantage that many remote Internet sellers had by not collecting the state sales taxes that were due.

NSGA has argued for fundamental fairness for more than a decade and would like to thank the more than 230 other organizations comprising the Marketplace Fairness Coalition, who helped advance this cause. 

 

Click above to access Sales Tax Collection information from the November/December 2018 Edition of NSGA NOW Magazine.