MINNEAPOLIS (WCCO) — If you buy a lot of things from online retailers, you may want to get your shopping done before June.
On Tuesday, the U.S. Supreme Court heard arguments in a case that could make it a lot easier for states to collect sales taxes.
Right now, when you buy from online-only retailers like Amazon, eBay or Etsy, you don’t pay a sales tax, in many cases.
But an unusual coalition, including President Donald Trump and Minnesota’s Democratic Attorney General Lori Swanson, is asking the Supreme Court to change that.
The fact that internet retailers for years have avoided sales taxes is widely blamed for the closing of retail stores in Minnesota and across the country.
The current law is based on a 1967 and 1992 Supreme Court Ruling that says if a retailer does not have a brick or mortar store in a state it does not have to pay sales tax.
“I am not sure if the Supreme Court is going to change their mind,” said Hamline University constitutional law professor David Schultz. “I think the best argument is that times have changed and that the reality that underpinned the original arguments back in 1967 and 1992 are essentially dinosaurs.”
Trump personally has lobbied for change, saying on Twitter: “Amazon is doing great damage to tax-paying retailers. Towns, cities and states throughout the U.S. are being hurt, many jobs being lost!”
Swanson has joined 42 other states with a friend of the court brief, urging the Supreme Court to make it easier for states to collect sales taxes.
For Minnesota, a lot is at stake.
A 2017 federal report says a change would mean Minnesota could collect more than $200 million more in sales taxes every year.
Minnesota’s two retail giants, Target and Best Buy, both issued statements, saying they want a level playing field.
“We have worked for years as part of a broad coalition of large and small retailers to close the loopholes that gives online-only retailers up to a 10 percent price advantage,” said Best Buy CEO Hubert Joly.
The Supreme Court ruling is expected in June, but even if the Supreme Court does not change existing law, Minnesotans are going to have to pay more.
That is because, starting in July of 2019, a new Minnesota law goes into effect that will require sales taxes on most internet sales.