The Supreme Court on Friday agreed to hear a case about whether states can require out-of-state online retailers to collect their sales taxes.
In agreeing to hear the case, South Dakota v. Wayfair, the court will revisit a 1992 decision in which it ruled that states could only require remote sellers to collect their sales taxes if the business had a physical presence in the state.
The case before the Supreme Court involves a South Dakota law enacted in 2016 that would allow the state to require out-of-state online retailers with a significant economic connection to the state to collect its sales taxes.
Supporters of South Dakota’s case include groups representing state and local governments and brick-and-mortar retailers. “The Court’s decision to grant South Dakota’s petition is an important signal for retailers that invest in storefronts and jobs in local communities,” said Deborah White, general counsel and retail litigation center president for the Retail Industry Leaders Association.
But some online businesses and lawmakers think that the 1992 decision should be upheld. A group of lawmakers that included Senate Finance Committee ranking member Ron Wyden (D-Ore.) had encouraged the Supreme Court not to hear the case, saying that the online sales tax issue should be left up to Congress to address.