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Tax Foundation to Supreme Court: Get Involved in Internet Sales Tax

  • Sep 24, 2013 | Gail Cole

 Supreme Court urged to hear New York's Internet sales tax case.

The Tax Foundation and the National Taxpayer's Union this week submitted an amicus curiae brief to the United States Supreme Court, urging it to hear an appeal on the case of Overstock and Amazon, Petitioners, versus the New York State Department of Taxation and Finance, et al. An amicus curiae is issued by someone "with strong interest in or views on the subject matter of an action, but not a party to the action." National Taxpayer's Union (NTU) and the Tax Foundation do indeed have strong views on the subject of Internet sales tax.

A non-profit, non-partisan research organization founded in 1937, the Tax Foundation has a mission to "educate taxpayers on tax policy." Also a non-profit, non-partisan organization, the National Taxpayer's Union, is "devoted to protecting the interests of federal, state and local taxpayers … ." Their amicus curiae brief urges the Supreme Court to accept the New York case in large part because, it reads, "This Court's decision will provide guidance on the line between states' power to shape their tax systems and the limits on that power guarded by the Commerce Clause."

In brief, the brief argues that since the landmark 1992 Supreme Court ruling in Quill Corp. v North Dakota--which limits state authority to impose sales tax on interstate commerce--sales tax has become more complex in United States. Whereas there were approximately 6,000 tax jurisdictions in 1992, there are now over 9,600 and counting. Roughly 50 changes to sales tax law take place in this country each month. Finally, a growing number of states are imposing a sales tax obligation on remote vendors who reach consumers via the Internet. NTU and the Tax Foundation argue that the "Court's guidance is needed to reduce uncertainty for taxpayers and discourage state efforts to obstruct a constitutional system of interstate taxation."

The Supreme Court was initially scheduled to respond to the writ of certiorari for both Overstock and Amazon on September 23; however, the court has extended the time to file response to petition to (and including) October 23, 2013. In addition to the brief amicus curiae filed by the Tax Foundation and NTU, one has been filed by the American Legislative Exchange Council (which "works to advance the fundamental principles of free-market enterprise, limited government, and federalism at the state level") and one has been filed by Newegg, Inc., a large Internet retailer.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.