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Beyond what is already on the docket for the 2017 term, the Supreme Court is likely to hear “the biggest state and local government case since I don’t know when,” says Soronen. That case involves a dispute over South Dakota’s law requiring online retailers to collect sales taxes. The South Dakota legislature passed the law hoping it would invite legal challenges, and it did.
Ultimately, state lawmakers want the U.S. Supreme Court to reverse a 1992 decision that said states cannot require retailers with no in-state physical presence to collect sales taxes. At the time of the ruling, the internet was in its infancy. With the growth of online commerce in the past 25 years, some estimate that states now miss out on more than $23 billion a year in potential online sales tax revenue.
Both Justices Anthony Kennedy and Neil Gorsuch have openly questioned the 1992 decision. In a 2015 concurring opinion, Kennedy called it “a case questionable even when decided” and welcomed legal challenges that might allow the court to re-examine the issue.
There is speculation, though, that Kennedy may step down in 2018 before the midterm elections. That could hurt states' chances of reversing the 1992 decision and could impact the outcome of other cases.
Beside the online sales tax dispute, Soronen and Thompson say state and local governments should keep an eye on the following six cases.
The Upcoming Supreme Court Cases That Matter Most to States and Localities
It's going to get interesting.
Ultimately, state lawmakers want the U.S. Supreme Court to reverse a 1992 decision that said states cannot require retailers with no in-state physical presence to collect sales taxes. At the time of the ruling, the internet was in its infancy. With the growth of online commerce in the past 25 years, some estimate that states now miss out on more than $23 billion a year in potential online sales tax revenue.
Both Justices Anthony Kennedy and Neil Gorsuch have openly questioned the 1992 decision. In a 2015 concurring opinion, Kennedy called it “a case questionable even when decided” and welcomed legal challenges that might allow the court to re-examine the issue.
There is speculation, though, that Kennedy may step down in 2018 before the midterm elections. That could hurt states' chances of reversing the 1992 decision and could impact the outcome of other cases.
Beside the online sales tax dispute, Soronen and Thompson say state and local governments should keep an eye on the following six cases.
The Upcoming Supreme Court Cases That Matter Most to States and Localities
It's going to get interesting.
