October 25, 2017
The fight for sales tax fairness between brick-and-mortar businesses and online sellers is a top advocacy agenda item for Jewelers of America. While we continue to push Congress to pass federal sales tax fairness, recent activity off Capitol Hill in the courts could finally tip the scales in the jewelry industry’s favor.

Quill in Question

In September, the South Dakota Supreme Court issued a ruling that the state's online sales tax law is unconstitutional. Rather than a defeat, it set the stage for South Dakota to file a petition to the Supreme Court to review the case and potentially reexamine the United States Supreme Court's 1992 Quill decision that established the current system under which states collect sales tax. The Quill decision prohibited states from collecting sales and use taxes from sellers that do not have a physical presence in-state; at the time, this was designed to protect mail-order companies. 

Should the nation’s highest court take up the case, Jewelers of America is hopeful that the Supreme Court will ultimately recognize that Quill does not reflect the modern retail landscape that exists 25 years after that decision. Instead, it has caused harm to traditional retailers by creating an unfair competitive advantage for online sellers when it comes to collection of sales tax.

Jewelers of America’s legislative counsel Haake Fetzer continues to monitor the issue closely and believes there is ample time for the case to be considered before the Court’s current term ends in June 2018. 

The Real Cost of Sales Tax 

In another important development, supporters of sales tax fairness have new and compelling data showing the negative financial impact of the current system. The Marketplace Fairness Coalition released an analysis of lost sales tax revenue for each state over the next five years. Overall, states stand to lose more than $211 billion in remote sales tax revenue through 2022 without a federal sales tax fairness solution. While the coalition previously had data on sales tax revenues lost across states, this is the first time that comprehensive state-by-state information has been made available. States hit hardest from 2018 to 2022, and their projected losses:
  • California - a loss of more than $32.3 billion
  • Texas - more than $21 billion
  • New York - more than $19.2 billion
  • Illinois - more than $10.1 billion.

Jewelers of America encourages members to visit the Marketplace Fairness Coalition website and click through to get data on your state. Then take action in Jewelers of America's Legislative Action Center to tell your Senate and House Representatives to support sales tax fairness legislation. Take Action here.
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