At issue is a rule saying that businesses don't have to collect state sales taxes when those businesses ship to a state where they don't have an office, warehouse or other physical presence.
It does seem fair, because as it now stands, certain retailers have an unfair advantage over others.
New Hampshire is one of the states that has no sales tax.
Additionally, independent businesses on websites like Etsy and Ebay would be included in a rewritten sales tax law, as well as third party merchants that operate in Amazon's global marketplace, which totaled almost two-thirds of the company's gross merchandise volume at $313.4 billion. However, the vast majority of purchasers do not pay tax on these transactions (98-99%), and it's likely that many aren't even aware of this law.
The precedent set by the 1992 case-Quill Corp. v.
The Supreme Court is hearing a case this week that could affect how much customers pay for online purchases.
"The current tax system favors online retailers over brick-and-mortar businesses, and undermines fair and open competition in the marketplace", the National Retail Federation argues in a brief it filed in the case. But online-only merchants-especially the large number of independently-owned businesses on sites like Etsy and Ebay-worry that this is more of a cash grab by state and local governments.
On Tuesday, the justices will hear arguments in South Dakota v. Wayfair Inc.
"Online retailers are omnipresent today - on consumers" smart phones, laptops, tablets, and computers - in a way that was inconceivable in 1967 or 199", she continued.
Instead, online companies-including Amazon and Overstock-said they support a nationwide law that addresses internet sales taxes that would relieve retailers from dealing with a patchwork of state measures.
In 1992, during the era of mail-order catalog shopping, the Supreme Court ruled that retailers can only be required to collect taxes in states where the company has an actual store or physical presence. Instead, the state argues that a sales tax should be imposed on businesses who have an "economic presence" in a state.
The state sued a group of online retailers after the law was enacted to force them to collect the state sale taxes, with the aim of overturning the precedent.