NTU Supports Lawsuit Challenging South Dakota's Unconstitutional Internet Sales Tax Scheme

Last week, the American Catalog Mailers Association (ACMA) and NetChoice filed suit against the State of South Dakota over its recently enacted Internet sales tax scheme that would force out-of-state sellers to collect and remit Mount Rushmore State sales taxes.

Since the United States Supreme Court decided Quill Corp v. North Dakota in 1992, the law of the land has been that states do not have the power to require out-of-state remote sellers to collect and remit such taxes. South Dakota’s recent attempt to circumvent the Court’s Quill Corp ruling is brazenly unconstitutional because online sellers lack a physical presence – or “nexus” – within the state. National Taxpayers Union (NTU) firmly supports ACMA and NetChoice’s decision to challenge this egregious constitutional violation.

“A fundamental premise of the United States Supreme Court’s Commerce Clause jurisprudence is that states lack the power to enact tax schemes on remote sellers,” said NTU’s Counsel and Government Affairs Manager Clark Packard. “The Quill decision established this precedent nearly 25 years ago. South Dakota’s attempted end run around the Supreme Court’s precedent is troubling. NTU will work tirelessly to protect taxpayers from unconstitutional statutes such as South Dakota’s.”