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A Wayfair longshot: Exemptions to internet sales taxes

October 09. 2018 10:06PM

One of the many horrible consequences of the U.S. Supreme Court’s decision in Wayfair v. South Dakota is that small businesses across the country will be forced to keep up with sales tax requirements in thousands of jurisdictions, even if they end up without any tax liability.

The court let state and local governments reach across state lines to grab revenue from online sales. The South Dakota law that led to the lawsuit did provide safe harbor for small businesses, but nothing in the court’s decision requires any such protection.

Last month, Rep. Jim Sensenbrenner introduced H.R. 6824, the Online Sales Simplicity and Small Business Relief Act, which would exempt businesses with less than $10 million in U.S. annual online sales from interstate sales taxes. Last week, New Hampshire Congresswoman Ann Kuster added her name to the bill, a welcome if belated sign of support.

Like most bills introduced this late in the session, H.R. 6824 has no chance to become law this year.

With 45 states looking at increased sales tax revenue, turning this ship around will take time. It will require Congress to start hearing from the businesses who will be paying higher taxes, and not just from the state and local officials who have their eyes on more revenue.


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