All Internet Sellers, Beware: States May Tax You
From marketers with millions or billions in annual revenue to the individual who finally decided to sell that "Casablanca" LaserDisc years after getting rid of the player, the case heard Monday by the Supreme Court of the United States may affect all of them. All states may ultimately force all marketers to collect sales tax. But what concerns the plaintiffs—the Direct Marketing Association—even more is that states may also force marketers to turn over information about the buyers, and states may have the right to do so without sellers being able to fight it in federal court. The court is expected to issue a ruling in DMA vs. Brohl by June 2015.
So beware, home crafter, it may be time to be concerned about the Tax Injunction Act. The 1937 law stops federal courts from restraining local and state tax collection efforts unless it's impossible for a state court to handle them in a "plain, speedy and efficient" manner. In other words, if SCOTUS decides that law should prevail over the status quo, then states will have the last word on most Internet sales tax cases.
However, one of the lawyers presenting DMA's argument on Monday says he feels "encouraged" because three of the judges "expressed concern about long-range, far-reaching implications" of such a decision. Justices Samuel Anthony Alito, Jr., Stephen G. Breyer and Antonin Scalia asked questions and made statements during oral arguments that seemed to agree with the association's point of view, George Isaacson says. The senior partner with Lewiston, Maine-based law firm Brann & Isaacson related made the comments Monday afternoon in a DMA conference call with reporters about the case.
DMA is arguing that the Commerce Clause and the right to privacy aspect of the First Amendment allow marketers to keep buyer information private. That way, marketers aren't violating their customers' rights, Isaacson says.