A report released yesterday by the Government Accountability Office (GAO) confirmed what retailers have been telling Congress for more than a decade--states are losing billions in revenue because of the loophole that allows many online retailers to evade collecting sales tax. After years of inaction in Congress, retailers are backing a challenge by the state of South Dakota to overturn the 1992 Supreme Court Quill decision, which created the loophole prior to the advent of modern e-commerce.
"The GAO report is confirmation of the damage that's been done to state budgets and brick and mortar retailers since the 1992 Quill decision. Special treatment for online-only retailers has meant billions in lost revenue and lost jobs in communities across the country," said Deborah White, senior executive vice president and general counsel at the Retail Industry Leaders Association (RILA).
"Retailers have worked in good faith with Congress to solve this problem, but have come up empty every year. As a result, retailers are asking the Supreme Court to consider South Dakota's direct challenge to Quill. Revisiting this decision--made when Amazon and other giant e-tailers didn't exist--is the fastest way to resolve the constitutional problem the Court created affirmed in Quill. Congress can still act if it eventually chooses to do so," said White.
RILA is the trade association of the worlds largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs, and more than 100,000 stores, manufacturing facilities, and distribution centers domestically and abroad.