Alexander, Heitkamp, Enzi, Durbin Statement Regarding Sales Tax Collection in the Aftermath of the Supreme Court’s Decision in South Dakota v. Wayfair

Posted on July 23, 2018

WASHINGTON, July 23, 2018 — U.S. Senators Heidi Heitkamp (D-ND), Mike Enzi (R-WY), Dick Durbin (D-IL), and Lamar Alexander (R-TN) today issued the following statement reinforcing that they would oppose premature efforts to prevent states from implementing the Supreme Court’s decision in South Dakota v. Wayfair. The senators want to gather additional feedback from states, businesses, and others impacted by the Court’s ruling, as states implement the Wayfair decision. 

“As sponsors of the Marketplace Fairness Act, we believe Congress needs to better understand the issues that states, businesses, and out-of-state sellers face following the U.S. Supreme Court’s decision in South Dakota v. Wayfair before taking legislative action,” said the senators.

“The Supreme Court’s decision in South Dakota v. Wayfair has rightly leveled the playing field between Main Street brick and mortar retailers and their out-of-state counterparts. We support the Court’s decision to overturn the physical presence standard and we agree with the Court’s reasoning.    

“Over the past several years, we have worked hard to advance common sense, bipartisan legislation that would help states, consumers, and businesses. In 2013, 69 senators voted for the Marketplace Fairness Act, but the legislation did not become law. 

“In the coming months, we look forward to engaging with our state and local partners, as well as small businesses, as they consider and implement the Court’s decision.  We want to hear how this decision will impact them, especially since the total uncollected sales and use taxes in the U.S. in 2015 alone was nearly $26 billion. We strongly support the rights of states to collect out-of-state sales and use taxes that are already owed, and we hope states take note of the guidance Wayfair provides regarding retroactivity, simplification and exemptions for small sellers. 

“We are encouraged that nearly half of all states have already adopted streamlining and simplification requirements as part of the Streamlined Sales and Use Tax Agreement (SSUTA), and more states are considering how they can take advantage of simplification efforts.

“We are mindful that any new sales and use tax collection requirements may present new and unanticipated challenges, especially for small businesses. However, Congress should not take any legislative action until we better understand the issues facing those impacted by this ruling.”

The Supreme Court ruled in June in South Dakota v. Wayfair that states have the ability to require out-of-state retailers to collect sales tax. Earlier this year, the senators submitted an amicus brief to the U.S. Supreme Court urging the Court to overturn a 25 year-old case determining whether states can require out-of-state businesses like out-of-state vendors to collect and remit state sales and use taxes. They also filed a brief asking the Court to reconsider the case last fall. 

Last year, Alexander, Enzi, Durbin, and Heitkamp introduced the Marketplace Fairness Act of 2017 – legislation that would give states the right to require out-of-state businesses or out-of-state retailers to collect and remit the sales and use taxes that are already owed under current law. In 2013, the Senate passed the Marketplace Fairness Act by a bipartisan vote of 69-27, but the legislation did not become law.