Daniel Hemel: The Supreme Court Must Act on Internet Sales Taxes — Because Congress Won’t

The Supreme Court must act on Internet sales taxes — because Congress won’t

When the Supreme Court last considered whether states could apply their sales taxes to out-of-state retailers, “Amazon” still referred to a rain forest. The justices could not — and did not — foresee that a quarter-century later, more than half the country would shop online, and that states would lose billions of dollars in sales-tax revenue each year because of e-commerce.

The justices then also probably did not anticipate another trend: the descent of Congress into gridlock. This phenomenon has several causes: hyperpartisanship, weak congressional leadership and the pernicious influence of money in politics. The result: Pressing problems that might have been addressed in an earlier era are now going unresolved.

The specter of legislative gridlock loomed large on Tuesday at the Supreme Court, when Marty Jackley, the attorney general of South Dakota, asked the justices to overrule two precedents from the pre-Internet, pre-gridlock age. The first, National Bellas Hess, Inc. v. Department of Revenue of Illinois, dates to 1967; the second, Quill Corp. v. North Dakota , is from 1992. Together, the cases establish that — under a doctrine called the “dormant commerce clause” — states cannot impose sales-tax obligations on out-of-state retailers unless Congress explicitly authorizes them to.

Read more at The Washington Post

Tax policy