The Trump administration officially asked the Supreme Court Monday to rule in favor of states that seek greater authority to collect sales taxes on Internet purchases, taking sides in a case bound to divide Republicans.
In an amicus brief filed Monday, Solicitor General Noel Francisco asked the court to update its jurisprudence regarding states’ power to collect sales taxes from companies that aren’t physically in the state.
“In light of Internet retailers’ pervasive and continuous virtual presence in the states where their websites are accessible, the states have ample authority to require those retailers to collect state sales taxes owed by their customers,” administration lawyers wrote in their brief.
The case in question, South Dakota v. Wayfair, could challenge the existing case law relating to online sales. In a decision in a 1992 case, Quill Corp. v. North Dakota, the court ruled states cannot collect taxes from retailers outside the state.
But the Trump administration’s brief charged that “Quill is badly reasoned and has proved unworkable in the age of modern e-commerce.”
Previous Supreme Court justices, the Department of Justice brief explained, could not have “foreseen the rise of modern e-commerce, through which Internet retailers can establish a pervasive and continuous presence — including by maintaining virtual storefronts that seek to replicate the experience of shopping in a physical store, available to every state resident 24 hours a day — even in states where they have no employees or physical property.”
A number of conservative congressional Republicans and prominent right-wing advocacy groups, however, oppose expanding states’ power to collect sales taxes.
However, President Trump has laid out his own views on the subject in occasional tweets accusing Amazon of failing to pay sales taxes.
In fact, the retail giant collects and pays sales taxes in all states where they are applicable, although some of the third-party sellers on its platform do not. In the past, Amazon has backed legislation to give states greater authority to collect taxes on online sales.
Last month, Treasury Secretary Steven Mnuchin testified on Capitol Hill that Trump “feels strongly” that states should be able to collect taxes on remote sales.
