South Dakota v. Wayfair, Inc. (17-494)

argument 17-494

South Dakota v. Wayfair, Inc.

Supreme Court of the United States 1h 0m 6 speakers 8 chapters transcribed 7 days ago official recording ↗

▲ 0

Transcript

jump: chapters · speakers · find in transcript

Transcript

Transcript generated automatically by AI and may contain errors.

What are the states’ main arguments for overturning Quill in South Dakota v. Wayfair?

John G. Roberts 0:00

We'll hear argument first this morning in Case 17-494, South Dakota v. Wayfair.

Lance J. Gable 0:06

General Jackley. Mr. Chief Justice, and may it please the Court, there are two very significant consequences brought about by Quill. First, our states are losing massive sales tax revenues that we need for education, health care, and infrastructure. Second, our small businesses on Main Street are being harmed because of the unlevel playing field created by Quill. where out-of-state remote sellers are given a price advantage.

Elena Kagan 0:34

I'm sorry. Isn't the problem not Quill, but the fact that you don't have a mechanism to collect from consumers? It's not the merchants who are paying the sales tax. It's the consumer. They're collecting it for you. So find a way to collect from them.

Lance J. Gable 0:53

Justice Sotomayor, we believe that we have a right because we have a statutory scheme in place that is non-discriminatory. There aren't apportionment issues. It's a fair scheme. It has safe harbors in place. Your

Elena Kagan 1:10

scheme, but I'm not concerned about your scheme as such. I'm concerned about the many unanswered questions that overturning precedents will create a massive amount of lawsuits about. I know you've told us that Quill has created its own set of lawsuits. I guess every law does. But here there are some significant ones. You're not retroactive, but your adversaries point out that that there are many States who have already made this collection retroactive. So we have that question. We have questions about what's the contact that you have to do to impose this obligation. Are we going to decide it under complete auto? Are we going to decide it under Pike? Balancing how much contact is enough to justify the placing this obligation on an out-of-town seller.

Elena Kagan 2:04

So there's going to be a host of questions. What happens when the tax program breaks down, as it already has for the states who are using it, and merchants can't keep track of who they've sold to? All of these are questions that are wrought with difficulties. So you're introducing — now a whole new set of difficulties to put behind something that's been in place for 30 years now?

Lance J. Gable 2:34

Justice Sotomayor, we would encourage using the doctrines that are already in place with complete auto when it comes to a tax assessment to look for discrimination, to look for apportionment issues, to look at that substantial nexus.

Elena Kagan 2:45

How about economic?

Lance J. Gable 2:47

Certainly economics, it can be addressed by Pike. Pike is a balancing test that this Court uses for its dormant commerce clause and commerce clause effect. It is able to take a look at the actual

Elena Kagan 2:58

— So how many sales does it take? You're at 200,000, I believe, or 200 sales, and I don't remember the monetary amount. But what's the minimum?

Lance J. Gable 3:10

In South Dakota, it's set at 200 —

Elena Kagan 3:13

I know what it was set at. It still doesn't answer the question. What's the minimum everywhere else?

Lance J. Gable 3:19

The minimum would be one sale, because if you look at complete auto, that creates the nexus. So what

Elena Kagan 3:24

are we going to do with the costs that you're going to put on small businesses?

Lance J. Gable 3:30

The small businesses are the ones that are affected most by quill. If you look at that small business on Main Street, it is that business that is put at a price disadvantage because of quill. Actually,

Elena Kagan 3:43

they're put at disadvantage not by quill, but by the fact that there are massive discount sellers, not just on the Internet, but even in stores now. I'm talking about the added cost to doing business for the small businessman. One of the briefs said it was a $250,000 cost to implement one of these sales tax programs.

Lance J. Gable 4:11

That brief left out that it begins, it's to scale, and it begins at $12 a month for 30 transactions. When you look at the cost associated with collection, it really depends.

Elena Kagan 4:22

That doesn't include auditing. It doesn't include integrating the program with the existing sales program of the company. It doesn't account for the maintenance of the programs. there's lots of costs that are inherent in a process of this type.

Lance J. Gable 4:43

One thing to look at is the fact that all these sellers, at least in the 45 states with the sales tax, already have a collection and a remittance obligation and already have in place the software that is able to calculate