Amazon was the first to fall, charging sales taxes nationally on Internet purchases. But it’s going to come everywhere as soon as the courts get their hands on the issue, unless Congress acts fast.
The limits on sales taxes these days all derive from one Supreme Court case: Quill Corp. v. North Dakota. Tax and spend politicians have been straining against the case ever since that 1992 decision.
They haven’t had much luck yet over the last 25 years, but times are changing. The makeup of the court is different and it seems likely that one of the concurrences of Quill, Justice Anthony Kennedy, is likely to flip next time around. So the states are seeking to get into the courts with the intent of getting a test case to overturn Quill.
That takes us to the question of Neil Gorusch, Donald Trump’s newest nominee to the Supreme Court. Gorusch worked with Kennedy as a clerk, and some say he sounds likely to join Kennedy in overturning Quill. If the left wing of the court swings toward higher taxes, then Quill is toast.
The only way to stop runaway states is, as the late Antonin Scalia pointed out, for the US Congress to step in and control the way state sales taxes work with online purchases. Bill have been introduced for years, some of them good, others bad, all designed to answer this question.
Until now they’ve punted. But the Quill doctrine is under threat like never before, threatening to open up Internet purchases to all sorts of crazy state taxes, passed by and for cronies. Relying on the whims of the courts is not good enough. It’s time to take control of Interstate commerce and keep it open, like the framers intended.