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Supreme Court takes up internet sales tax case

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But South Dakota concluded in 2016 that the explosion in online sales changed the market drastically. So it passed a law requiring all but the smallest retailers, including internet companies, to collect taxes on the sales they make in the state, even if they had no physical presence there.

Lower courts blocked the law, relying on the Supreme Court precedents, and the justices hear the state’s appeal on Tuesday. A total of 35 other states have weighed in on South Dakota’s side.

Online companies “are far more present in the South Dakota economy than most of the state’s physically present retail businesses,” says Eric Citron, a Washington lawyer representing the state. “The internet now makes it possible for out-of-state sellers to reach consumers with engaging, interactive virtual storefronts in our homes or on our smartphones at any hour of the day.”

As for the burden of dealing with thousands of tax rates across the country, the state says software programs now make it possible for a retailer to instantly compute the correct sales tax simply by entering a buyer’s ZIP code.

Times have changed, Citron says, and the court’s earlier reasoning no longer applies. “Amazon.com did not begin selling books out of Jeff Bezos’s garage until July 1995, and Bezos himself described Amazon as a pipsqueak in comparison to Barnes & Noble.”

But the internet companies that sued to block the law — Wayfair, Overstock and Newegg — say in their Supreme Court filings that state sales tax systems “remain inordinately complex and burdensome during the internet era, just as they were before it began.”

The number of local tax jurisdictions has doubled to 12,000, the companies say, and local laws vary widely on what goods are subject to sales taxes. During back-to-school tax holidays, for example, some states exempt clothing, but others don’t. Some include shoes, and the definition of what qualifies as school supplies varies widely.

Forcing internet retailers to pay sales taxes everywhere would stifle competition and make it much harder for start-ups to get into the market, the companies say. In a friend-of-court brief, eBay says taxing internet sales would place “crushing burdens on small online businesses, causing many to curtail operations and damaging the national economy.”

And besides, the companies argue, while e-commerce is growing rapidly, it still accounts for only about 9 percent of all retail sales — a smaller share than catalog companies had when the Supreme Court exempted them from paying sales taxes in states where they had no physical presence.

The companies also note that the largest internet retailer, Amazon.com, now pays sales taxes in all the 45 states that collect them. That leaves out only Alaska, Delaware, Montana, New Hampshire and Oregon. Some local communities have sales taxes in Alaska and Montana, but they are not levied statewide.

South Dakota estimates that the states could pick up a combined $34 billion a year if the court allows them to tax internet sales. But the General Accounting Office estimates that the number would be at most about $13 billion.

The Supreme Court has never held that a sales or use tax can be imposed on a retailer who sells to a customer who lives in a state where the company has no physical presence. The justices will issue their decision in this case by late June.

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'No idea what he stands for!' Keir Starmer ripped apart as Labour flounders on core values

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SIR KEIR STARMER’s vague confirmation of his political beliefs has been slammed as the Labour leader now faces demands for clarity over his party’s positions.

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Justice Dept. deems New York City, Portland and Seattle ‘anarchist jurisdictions’

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The Department of Justice on Monday released a list of cities it has deemed “anarchist jurisdictions” under President Donald Trump’s instructions earlier this month to review federal funding to local governments in places where violence or vandalism has occurred during protests.

That memo directed Attorney General William Barr, in consultation with Office of Management and Budget Director Russ Vought and acting Homeland Security Secretary Chad Wolf, to identify jurisdictions “that have permitted violence and the destruction of property to persist and have refused to undertake reasonable measures to counteract these criminal activities (anarchist jurisdictions).”

On Monday, the Justice Department labeled New York City, Portland and Seattle such areas, though the department said it was still working to identify other jurisdictions that meet criteria outlined in Trump’s memo.

“We cannot allow federal tax dollars to be wasted when the safety of the citizenry hangs in the balance,” Barr said. “It is my hope that the cities identified by the Department of Justice today will reverse course and become serious about performing the basic function of government and start protecting their own citizens.”

As part of its rationale for labeling the cities as such, the Justice Department cited city councils voting to cut police funding, the refusal to prosecute protesters for charges like disorderly conduct and unlawful assembly, the rejection of federal intervention, and law enforcement officials suffering injuries during violent outbursts.

New York Attorney General Letitia James responded to the Justice Department’s announcement in a statement Monday, saying Trump is “using the last few months of his presidency to sow more chaos, more hatred, and more fear,” and pledged to defeat the Trump administration in court over any such withholding of funding to the city and state.

“This designation is nothing more than a pathetic attempt to scare Americans into voting for a commander-in-chief who is actually incapable of commanding our nation,” she said, adding that Trump “should be prepared to defend this illegal order in court, which hypocritically lays the groundwork to defund New York and the very types of law enforcement President Trump pretends to care about.”

Democratic mayors and governors earlier this month bashed Trump over his latest effort aimed at what he calls “Democrat-run” cities and states. They said it was illegal for the executive branch to unilaterally withhold funding from their jurisdictions and that Trump was merely seeking another distraction from the U.S. coronavirus death toll, which has now topped 200,000.

“It is another attempt to kill New York City,” New York Gov. Andrew Cuomo told reporters during a late-night conference call earlier this month, adding Trump “better have an army if he thinks he’s going to walk down the streets in New York.”

Washington Gov. Jay Inslee called Trump’s efforts “the latest baseless, petty and divisive move by President Trump to distract from his abject failure to protect Americans from COVID-19.”

“With more than 185,000 lives lost on his watch, we won’t forget,” he said. “The president cannot and will not defund us. He is not a dictator and laws still apply to him.”

At the time, a White House official said the effort was aimed at withholding grant money from such jurisdictions it deemed to be “anarchist.”

“We’re not going to keep providing those funds from the federal level if they’re not using them,” the official said.



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'I want to know about it!' Hancock hits back at claims test and trace is still a farce

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MATT HANCOCK challenged a Labour MP over his claims that the Health Secretary had not managed to resolve problems with the NHS Test and Trace system and informed the House of Commons of his solutions to the issue.

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