Supreme Court Decision on Sales Tax Collection: Uncertainty, Havoc, New Costs and Unknown Exposure for Small Businesses Created

By at 21 June, 2018, 1:08 pm


Washington, D.C. – Today the U.S. Supreme Court ruled that states now have the power to force small businesses outside of their borders to collect taxes on remote sales. Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan issued the following statement on the South Dakota vs. Wayfair ruling:

“Small businesses and internet entrepreneurs are not well served at all by this decision. The precedent that a business must have a physical presence in a state before it can be required to collect sales taxes on remote sales was a sound standard, but now has been upended by the U.S. Supreme Court.  The decision will create havoc for small businesses and the marketplace, and opens the possibility that states may use this decision to flex their newfound taxing power beyond internet sales. The dissenting justices were correct in their findings.  As appropriately stated by Chief Justice John Roberts in his dissent: ‘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.’ Now, Congress must finally step up. In fact it must do so immediately given the many unanswered questions and issues posed by the ruling.  It creates uncertainty, havoc, vast new costs and unknown exposure for small businesses. The fact that small businesses must now act as tax collectors for thousands of separate state and local jurisdiction is outrageous.”

SBE Council supports various solutions as well as limitation on states that attempt to regulate and tax businesses outside of their borders. For example, the No Regulation Without Representation Act would provide a check on attempts by states that overreach. In the coming weeks, SBE Council will be reaching out to its friends in the Congress to act quickly so that certainty will be brought back to the marketplace, and small businesses can focus on their growth.


Karen Kerrigan,  

Raymond Keating, Chief Economist,


SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: Follow on Twitter: @SBECouncil


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