U.S. Supreme Court Brings Parity to Sales Tax Treatment

The United States Supreme Court issued a ruling allowing states to require remote retailers to collect sales tax on purchases. IREM supports this decision to level the playing field by treating online and brick-and-mortar retailers equally, which has long been one of IREM’s priority issues.

In a 5-4 decision, the Court overturned the 1992 Quill Corporation v. North Dakota ruling that barred states from requiring a business to collect sales tax if the business did not have a physical presence in the state. However, the Quill decision did more harm to brick-and-mortar stores and state and local governments than could have been anticipated at the time.

IREM applauds the Court’s actions to bring parity to the millions of businesses that will no longer be forced to compete on uneven ground. IREM has taken this issue to Congress in past Capitol Hill days, and most recently, submitted an amicus curiae (friend of the court) brief supporting this decision.

IREM Position
IREM supports legislation that would create a level playing field in the retail marketplace by allowing states to collect existing sales tax. Currently, states are unable to collect existing sales tax from remote retailers that do not have a physical presence in the state, creating a price disadvantage for brick-and-mortar retailers.
IREM opposes a federal sales tax on purchases made over the internet. Federal legislation should not preempt state efforts to address their own sales and use tax issues. IREM believes the key issues associated with the remote sales tax debate affect state and local government revenues; therefore, state and local legislative action is appropriate.

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