Attorney generals from 35 states join amicus brief to allows states to close online sales tax loophole

Attorneys general from 35 states recently joined an amicus brief filed by the Colorado Attorney General in support of a suit that seeks to overturn a rule that forbids states from collecting sales tax from absentee retailers.

The amicus brief is in support of a petition filed by the state of South Dakota — South Dakota v. Wayfair, Overstock, and Newegg — with the U.S. Supreme Court. South Dakota has asked the Supreme Court to use its case as an opportunity to overrule the Quill Corp. v. North Dakota decision, from 1992, which restricts states from collecting sales tax from absentee retailers.

The Retail Industry Leaders Association voiced its support for the effort to overturn the Quill Corp. decision. Deborah White, president of the Retail Litigation Center and General Counsel for RILA, said the decision created a loophole that gave Internet-only retailers a price advantage over brick and mortar stores.

“Overwhelming bipartisan support from such a large number of state attorneys general shows just how critical this issue is to states across the country that have been grappling with the negative impacts of Quill,” White said. “The Quill rule is anachronistic both with respect to the Court’s current dormant Commerce Clause jurisprudence and with respect to today’s commercial realities. The Supreme Court should heed the call of these 35 State Attorneys General and take South Dakota’s case to end the tax preference for online-only retailers.”

Bipartisan support from the top legal officials in the United States shows that this is an issue that warrants attention, White said.