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March 12, 2018

Maine retailers want Wayfair, other online retailers, to pay state sales taxes

Photo / Amber Waterman
Photo / Amber Waterman
Curtis Picard, president and CEO of the Retail Association of Maine, issued a statement supporting a South Dakota lawsuit against Wayfair and other online retailers that will be heard by the U.S. Supreme Court later this spring.

The Retail Association of Maine is supporting a "friend of the court" brief filed by its national trade group in a South Dakota lawsuit filed against Boston-based online home goods retailer Wayfair that asks the U.S. Supreme Court to revisit the question of whether retailers with "no physical presence" in a given state are exempt from collecting state sales tax.

The U.S. Supreme Court agreed on Jan. 12 to hear the case of South Dakota v. Wayfair Inc. Overstock.com Inc and Newegg Inc., paving the way for a pivotal decision in the decades-long debate on whether online retail activity should be exempt from sales taxes. The Supreme Court is scheduled to hear oral arguments on April 17.

Under the Supreme Court's 1992 decision on Quill Corp. v. North Dakota, retailers with no physical presence in a state were determined to be exempt from collecting sales taxes. Since then, as online retail has grown significantly, traditional brick-and-mortar retailers that are required to collect sales taxes say the 1992 ruling has put them at a severe competitive disadvantage. States also have complained that they are losing out, collectively, on billions of dollars in revenue annually.

Curtis Picard, president and CEO of the Retail Association of Maine, issued the following statement backing its national trade group's support of South Dakota in the court case:

"It has been more than 25 years since the Quill decision and much has changed in our economy since 1992. The internet is no longer in its infancy and consumers are choosing online platforms as additional retail channels. Regardless of where a sale occurs, a sale is a sale and sales tax should be collected and remitted by both online-only and brick and mortar retailers.

"Main Street brick and mortar retailers are the backbone of Maine's economy, They employ 83,000 Mainers, pay property and employment taxes and they are the first to support the local sports team or community group. It is estimated that Maine loses more than $40 million in sales tax each year to remote sales where sales tax is owed but not collected. These are revenues that could be used to lower everyone's taxes, build roads, improve schools and invest in Maine."

Picard said the Retail Association of Maine is pleased the U.S. Supreme Court is revisiting the Quill decision by agreeing to hear the Wayfair case.

"We urge the U.S. Supreme Court to overturn Quill and recognize the global economy in which we live," he said. "Overturning Quill will reinstate some equity into our economy rather than continuing to reward companies with an unfair advantage as they compete with Maine businesses while contributing nothing to Maine's economy."

Tom Largay, co-owner of Old Port Card Works and Old Port Candy Co. in Portland, who also serves as chairman of the Retail Association of Maine's board, agreed with Picard that it's time to overturn the 1992 ruling.

"As a small, independent main street retailer, I can tell you that my commitment is to my community, where I live and operate," he said. "I believe that the Supreme Court has an opportunity to level the playing field for me, and other retailers like me, who have been at a disadvantage compared to internet retailers who aren't required to collect sales tax."

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South Dakota vs. Wayfair Inc., et. al. friend of the court filing

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