Durbin Statement on Supreme Court Decision Not to Consider Online Sales Tax Collection Case

[WASHINGTON, D.C.] - U.S. Senator Dick Durbin (D-IL) today made the following statement after learning the Supreme Court has decided not to consider a case involving whether states can require the collection of sales and use taxes already owed under state law by out-of-state businesses under the Commerce Clause.  Specifically, the case involved a New York law requiring retailers with affiliate advertisers in New York but no physical presence such as a warehouse or distribution center to collect sales tax and whether it is constitutional under the Commerce Clause. 


“This decision further illustrates why a national solution is needed to level the playing for local brick-and-mortar retailers and help them compete more effectively against out-of-state internet sellers,” said Durbin.  “In 1992, the Supreme Court held that Congress ultimately has the power to regulate interstate commerce including allowing states to equally enforce state and local sales taxes on sales into the State.  Over 20 years later, the Senate overwhelmingly agreed to do away with the patchwork of confusing state laws that currently govern remote sales by passing the bipartisan Marketplace Fairness Act in May of this year.  It’s time for the House of Representatives to stand up for Main Street businesses and do the same.”


The Marketplace Fairness Act of 2013 – introduced by Durbin and Senators Mike Enzi (R-WY), Lamar Alexander (R-TN) and Heidi Heitkamp (D-ND) – would give states the option to require the collection of sales and use taxes already owed under state law by out-of-state businesses, rather than rely on consumers to remit those taxes to the States, the method of tax collection to which they are now restricted.  Under the current tax loophole, while brick-and-mortar retailers collect sales and use taxes from customers who make purchases in their stores, many online and catalog retailers do not collect the same taxes.


The bill currently has the support of over 280 labor, business and government organizations while 22 Governors (15 Republicans and 7 Democrats) have come out in support of leveling the playing field for businesses by addressing sales tax fairness.