Supreme Court Opens Floodgates to Internet Extraterritorial Taxation in 5-4 Vote

BY Heather Greenfield
June 21, 2018

Washington — The Supreme Court has issued a ruling permitting states to tax e-commerce providers outside their own borders.

The case, pitting South Dakota against Wayfair, Overstock.com, and Newegg, was a closely watched dispute over whether these companies would have to collect taxes based on the hundreds of jurisdictions where their customers might live. While online stores already pay taxes in states where they have a physical presence, South Dakota and other states have sought to assess sales taxes based on where goods are sent.

The Computer & Communications Industry Association filed an amicus brief which argued that allowing states “to engage in extraterritorial taxation would burden internet services, and the startups and small businesses that rely on them.” The following can be attributed to CCIA President & CEO Ed Black:

“Today’s decision promises to subject small businesses reliant on e-commerce to new and burdensome tax obligations in states across the nation. As we approach the celebration of our nation’s independence, we should recall that taxation by a remote government was an injustice that animated the founding of our nation.”

“CCIA has serious concerns about the future implications for e-commerce if governments are empowered to tax those who reside beyond their borders.”

Related Articles

CCIA Statement on Conclusions of 12th WTO Ministerial Conference, Joint Industry Statement on E-Commerce Moratorium

Jun 17, 2022

Washington – The WTO’s 12th Ministerial Conference (MC12) took place on June 12-16. Trade ministers met to review the functioning of the multilateral trading system and to take action on the future work of the WTO.  At the conclusion of these meetings, WTO Members renewed the longstanding moratorium on applying customs duties on electronic transmissions, often…

Product Safety: CCIA Europe Welcomes European Parliament Vote on New EU Rules

Jun 16, 2022

Brussels, BELGIUM — Today, the European Parliament’s Internal Market Committee (IMCO) adopted its position on the proposed General Product Safety Regulation (GPSR). The aim of these new rules is to update the European framework that ensures the safety of products sold offline and online in the EU. The Computer & Communications Industry Association (CCIA Europe)…

Supreme Court Pauses Texas Social Media Law Ahead Of Lower Court Reviewing Constitutional Concerns

May 31, 2022

Washington – The Supreme Court has issued an emergency ruling temporarily blocking HB 20, the Texas social media law, from being enforced while a lower court resolves a preliminary First Amendment challenge to the statute.  The Computer & Communications Industry Association and NetChoice jointly filed an emergency brief Friday, May 13, asking the U.S. Supreme…