Point-of-View on the Wayfair Case Focuses on the Struggles

Yeo & Yeo CPAs & Business Consultants

Chief Justice John G. Roberts wrote the dissenting opinion in the South Dakota v. Wayfair case. He acknowledged that prior rulings in this area, including the Quill decision, were flawed. But the Chief Justice concluded that there was insufficient cause for the top court to overturn the precedents.

The dissenting opinion says, “E-commerce has grown into a significant and vibrant part of our national economy against the backdrop of established rules, including the physical-presence rule. Any alteration to those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress.”

Justice Roberts also notes that the ruling is significant for businesses of all sizes. But smaller operations may have more difficulty complying with the complexity of the wide variety of sales tax rules around the country.

Roberts sites examples of sales tax disparities in his dissenting opinion, “Texas taxes sales of plain deodorant at 6.25% but imposes no tax on deodorant with antiperspirant. Illinois categorizes Twix and Snickers bars – chocolate-and-caramel confections usually displayed side-by side in the candy isle – as food and candy, respectively (Twix have flour; Snickers don’t), and taxes them differently.”

Justice Robert’s noted that the internet allows even the smallest operations to connect to customers nationwide, but the sales tax collection requirement could be a severe detriment. “People starting a business selling their embroidered pillowcases or carved decoys can offer their wares throughout the country – but probably not if they have to figure out the tax due on every sale.” Says the dissenting opinion.

As you can see by the many notes from Justice Roberts, the new legislation can be confusing when selling in many states. We are here to help guide you through these changes. Contact your Yeo & Yeo Advisor for help unique to your situation.

 

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Yeo & Yeo CPAs & Business Consultants

Yeo & Yeo CPAs & Business Consultants

Yeo & Yeo CPAs & Business Consultants is a leading Michigan accounting firm. Since 1923, our industry-specialized Michigan accountants and consultants have provided clients with forward-thinking, comprehensive solutions in accounting, audit, tax, technology and business consulting.