Arlington, VA – The American Legislative Exchange Council (ALEC) today submitted an Amicus Brief to the Supreme Court urging the physical presence standard be upheld, as last ruled in Quill Corp. v. North Dakota. If the Court decides to rule against the physical presence standard in the upcoming case South Dakota v. Wayfair, states will be able to reach across their borders and heavily tax main street businesses, small businesses, and entrepreneurs.
“South Dakota is attempting to upend 230+ years of Commerce Clause precedent. The physical presence standard in Quill and expressed in Supreme Court cases since the early 1800’s placed limits on state taxing authority – states can only collect sales tax from entrepreneurs and small businesses that have some type of tangible presence in the state,” said Jonathon Hauenschild, Counsel of record for ALEC. “Repealing the physical presence standard will subject small businesses and entrepreneurs to taxing jurisdictions where they have no ability to vote to influence policymakers.”
“This ill-advised revenue strategy of adding additional sales tax compliance burdens on remote retailers will produce less revenue than predicted at a steep cost to innovation and jobs growth,” said Joel Griffith, Director of the Center for State Fiscal Reform.
“The roughly 12,000 state and local taxing jurisdictions across our nation present a clear and present danger to interstate commerce if they would be allowed to subject out of state businesses to their tax collection rules and regulations,” said Jonathan Williams, ALEC Chief Economist and Vice President of the Center for State Fiscal Reform. “This misguided approach violates the constitutional principles that protect tax competition, innovation and entrepreneurship. For these reasons, ALEC members stand ready to defend Constitutional protection of interstate commerce.”
About the American Legislative Exchange Council – The American Legislative Exchange Council is the largest nonpartisan, voluntary membership organization of state legislators in the United States. The Council is governed by state legislators who comprise the Board of Directors and is advised by the Private Enterprise Advisory Council, a group of private, foundation and think tank members. For more information about the American Legislative Exchange Council, please visit: alec.org.
