ALEC Statement on South Dakota v. Wayfair Supreme Court Decision

FOR IMMEDIATE RELEASE
Contact:Anna Tarnawski
atarnawski@alec.org
973-879-2273    

South Dakota Ruling Major Loss for Small Businesses

Decision Hurts Businesses and Interstate Commerce—Congress is Only Solution

Arlington, VA (June 21, 2018) — The American Legislative Exchange Council (ALEC) is disappointed by today’s decision in favor of South Dakota in South Dakota v. Wayfair. The Supreme Court ruling empowers state governments to reach across their borders to tax and audit interstate online commerce. This is detrimental to small businesses and online retailers as the decision will stifle the economic growth of these businesses as well as discourage entrepreneurship. Congress remains the only avenue to protect small businesses and taxpayers.

The ruling to kill Quill—the physical presence standard—subjects small businesses and entrepreneurs to taxing jurisdictions where they have no ability to vote to influence policymakers.

“Today’s Supreme Court decision will harm America’s innovators and small businesses. By permitting states to tax businesses outside of their borders, the Supreme Court’s decision will usher in a new, unheralded period in interstate commerce. Small businesses and innovators will be subject to over 12,000 taxing jurisdictions in the United States. They will face audits and compliance costs very few can comprehend. And many businesses will likely limit their reach or go out of business rather than face the risk of audit from states like California, Illinois, or New York. At this point, only Congress can save small businesses and innovators by passing legislation to protect them from over-aggressive state tax collectors,” said Jonathan Hauenschild, Counsel of Record for ALEC.

“With this ruling, onerous compliance costs related to remote sales taxation will threaten to stunt economic dynamism. Hardworking individual and business taxpayers deserve protection from out-of-state tax collectors and regulators. Congress is now the only way to safeguard innovators and entrepreneurs from aggressive regulation aimed at out-of-state taxpayers and out-of-state voters,” said Jonathan Williams, ALEC Chief Economist and Vice President of the Center for State Fiscal Reform.

“Today’s ruling threatens to stunt economic growth. More concerning, it marks a departure from a constitutional understanding of federalism. Remote retailers-many of whom are small businesses-may soon be forced to keep track of the thousands of taxing jurisdictions across the country, many with their own rates, bases, rules and regulations. Congress remains the only solution to this threat,” said Joel Griffith, Director of the Center for State Fiscal Reform.

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The American Legislative Exchange Council is the largest nonpartisan, voluntary membership organization of state legislators in the United States. The Council is governed by state legislators who comprise the Board of Directors and is advised by the Private Enterprise Advisory Council, a group of private, foundation and think tank members. For more information about the American Legislative Exchange Council, please visit: www.alec.org.