Will Anthony Kennedy change taxes in America forever? Red States are betting yes.

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I’ve written before about efforts by some red states to get the Supreme Court to reverse course and allow them to force out-of-state, online-only retailers to collect and remit sales taxes to state governments where their residents buy goods from Overstock, third party sellers on Amazon, and so on.

Well, there’s a new entrant to the game: Indiana, which joins Alabama, Mississippi, Tennessee, South Dakota and South Carolina in wanting to see tax rules in America changed forever.

With President Donald Trump looking on, Anthony M. Kennedy, senior Associate Justice of the Supreme Court of the United States, swears in judge Neil M. Gorsuch to be the Supreme Court's 113th justice Monday, April 10, 2017, in the Rose Garden of the White House in Washington, D.C. Gorsuch’s wife Louise held a family Bible. (Official White House Photo by Shealah Craighead)

With President Donald Trump looking on, Anthony M. Kennedy, senior Associate Justice of the Supreme Court of the United States, swears in judge Neil M. Gorsuch to be the Supreme Court’s 113th justice Monday, April 10, 2017, in the Rose Garden of the White House in Washington, D.C. Gorsuch’s wife Louise held a family Bible. (Official White House Photo by Shealah Craighead)

Indiana has filed a lawsuit in defense of a new law that would allow the state to collect sales tax from out-of-state businesses.

Gov. Eric Holcomb said Monday that he wants the U.S. Supreme Court to overturn its 1992 ruling that said out-of-state retailers don’t have to collect and remit sales tax if they don’t have a physical presence in the state.

Holcomb is mad because Overstock, Wayfair and others not having to collect and remit these taxes means the state is failing to bring in $77 million in taxes that are already legally owed by Indiana-based buyers. Not surprisingly, that means people who want even higher taxes have a stronger argument for jacking them up, though so (theoretically) do conservatives who want to cut spending.

Will Holcomb get his way?

First of all, if the issue goes to the Supreme Court, the answer is is looking to be “yes.” Anthony Kennedy has already signaled that he thinks the caselaw preventing states from enforcing Indiana-style laws is wrong. It seems that Gorsuch does, too.

But on second glance, maybe not. A lot of states, and retailers, would drop their lawsuits if Congress passed a bill that allowed states to require collection and remittance, but streamlined the system, limited the size of retailers who could be compelled to collect and remit, limited insane audit obligations and so on. Congress clearly can do this, under the Commerce Clause, and arguments for doing it seem to be gaining steam since mom-and-pop operations selling $100,000 of goods a year on Etsy really don’t want to have to pay over taxes on sales in 40-some states and countless other localities, and then get audited on top of it all (but, really, big sellers can easily cope with the requirements the Court is going to hit everyone with, eventually).

A lot of people aren’t going to like all this, but the best answer really is to press for spending cuts and sales tax cuts in your state or city. If they’re only collecting 2 percent instead of 5 percent, you’re going to care a lot less about that extra line item on your delivery bill (after all, you’re already paying tax when you buy Amazon goods). And there’s nothing Anthony Kennedy can do to stop legislators instituting conservative tax policy in Virginia, or Texas, or Ohio.


via RedState