Richard Lehman comments on South Dakota v. Wayfair, Inc., a recent Supreme Court decision

BOCA RATON, Fla. - Nov. 24, 2018 - PRLog -- Florida Tax Attorney Richard Sam Lehman has published another review on his blog on tax issues. Supreme Court precedent has held that "that an out-of-state seller's liability to collect and remit the tax to the consumer's State depended on whether the seller had a physical presence in that State, but that mere shipment of goods into the consumer's State, following an order from a catalog, did not satisfy the physical presence requirement."  If state may not require the seller to collect the sales tax, they have to rely on self-reporting by individual purchasers, which results in significant lost tax revenue for the states.  This obviously has increasing significance in today's ecommerce, with state tax losses estimated at between $8 to $33 billion every year.

The estimated impact on South Dakota is even higher than normal because South Dakota has no income tax, relying significantly on sales tax revenue.  South Dakota estimated that it loses $48 to $58 million in lost sales tax.  In order to remedy the problem of lost tax revenue, South Dakota passed a law that "requires out-of-state sellers to collect and remit sales tax "as if the seller had a physical presence in the state." §1. The Act applies only to sellers that, on an annual basis, deliver more than $100,000 of goods or services into the State or engage in 200 or more separate transactions for the delivery of goods or services into the State."  The enforcement of the act was stayed "until the constitutionality of the law has been clearly established."  After the law was struck down in state courts due to US Supreme Court precedent, the Supreme Court granted cert.

The majority opinion noted that modern commerce clause cases "rest upon two primary principles that mark the boundaries of a State's authority to regulate interstate commerce.

The review will be published in full on the Blog of Richard Lehman at https://richardlehmanblog.blogspot.com/

Richard Sam Lehman, Florida tax lawyer

Richard S. Lehman has established a sophisticated private practice focusing on tax law. His background, education, and experience has distinguished him in this complex field. A published author and noted speaker, Mr. Lehman has carved a reputation as a powerful client advocate.

https://thelehmantaxlawlibrary.com/
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