Overstock Files U.S. Supreme Court Brief in South Dakota v. Wayfair State Tax Case
March 28 2018 - 6:47PM
Overstock.com, Inc. (NASDAQ:OSTK), together with fellow online
retailers Wayfair Inc. and Newegg Inc., today filed a legal brief
[link to U.S. Supreme Court docket page] with the United States
Supreme Court in the case of South Dakota v. Wayfair Inc., et al.
(Case No. 17-494). South Dakota is asking the Supreme Court to
overturn the long-standing precedent of Quill Corp. v. North
Dakota, 504 U.S. 298 (1992), a case which prevents a state from
compelling an out-of-state company to collect sales tax, unless the
company has a physical presence in the taxing state.
Overstock and others know that overturning Quill would usher in
a new era of ever-growing state powers—not only in cross-border
tax, but also in cross-border regulation—all at the expense of
consumers and interstate commerce generally. South Dakota is just
one state, but South Dakota’s arguments seek to compel Internet
vendors and other remote sellers to be exposed to the impulse and
preferences of each of the nation’s 12,000 state and local taxing
jurisdictions.
Rather than overturn sound Supreme Court precedent, Overstock
has long-advocated solutions honoring the Interstate Commerce
Clause through Congressional enactment of appropriate sales tax
legislation, balancing the interests of states, consumers, and
interstate businesses, by providing for simpler and more uniform
sales tax administration. Several viable initiatives are now
working through Congress, including the Online Sales Simplification
Act considered by Mr. Goodlatte (R-VA), the No Regulation Without
Representation Act introduced by Mr. Sensenbrenner (R-WI), and the
Remote Transactions Parity Act introduced by Ms. Noem
(R-SD).
In their brief, Overstock and other respondents demonstrate that
South Dakota, in its effort to do away with Quill, is at odds with
the real-world experience of both large and small online retailers,
making the Internet a more complicated and expensive environment
for businesses and consumers alike.
“The South Dakota law is yet another short-sighted attempt to
expand improperly local powers without due regard to national
consequences,” said Jonathan Johnson, member of the Overstock board
of directors. “Pierre, South Dakota is as good a place as any
in this country; however, it is not the place to formulate fair tax
collection systems that take into account the national interests of
interstate commerce. At least, the Founders did not think
so. For good reason, under the Constitution, interstate
commerce is one of the expressly enumerated powers of Congress;
that’s why we urge the Supreme Court to affirm the Quill standard
and rightly urge Congressional action on pending legislation.”
In their brief, the Overstock and the other respondents
demonstrate that the current state sales tax system has become a
crazy-quilt, involving thousands of different state and local sales
tax jurisdictions, all with varying rates, rules, and
administrative requirements. Every independent analysis, starting
with the congressionally-authorized Advisory Commission on
Electronic Commerce in 2000 and concluding with a detailed study by
the General Accountability Office (GAO) issued in December 2017,
has underscored the severe difficulty, confusion and expense in
compliance with the tangle of these inconsistent state and local
sales tax laws. Overstock and others argue: “the State [South
Dakota] has not overcome a basic truth: state sales and use tax
systems remain inordinately complex and burdensome during the
Internet era, just as they were before it began.”
Significantly, the 2017 GAO report also proves that state claims
of “lost” tax revenue on Internet sales are grossly inflated – by
as much as 300 percent – and that uncollected state sales tax is
dramatically declining, due to the in-state physical presence of
many large omni-channel retailers who sell both in stores and
online.
Overstock believes overruling the Quill precedent will cause
substantial economic disruption for companies seeking to reach a
national market through the Internet, from startups and
family-owned businesses to larger remote sellers. Consequently,
Overstock urges the Supreme Court to reject the erroneous claims of
the State and permit Congress to enact balanced federal legislation
to address the remote sales tax issue.
About Overstock.com
Overstock.com, Inc. Common Shares (NASDAQ:OSTK) / Series A
Preferred (Medici Ventures’ tZERO platform: OSTKP) / Series B
Preferred (OTCQX:OSTBP) is an online retailer based in Salt Lake
City, Utah that sells a broad range of products at low prices,
including furniture, décor, rugs, bedding, and home improvement. In
addition to home goods, Overstock.com offers a variety of products
including jewelry, electronics, apparel, and more, as well as a
marketplace providing customers access to hundreds of thousands of
products from third-party sellers. Additional stores include Pet
Adoptions and Worldstock.com dedicated to selling artisan-crafted
products from around the world. Forbes ranked Overstock in its list
of the Top 100 Most Trustworthy Companies in 2014. Overstock
regularly posts information about the company and other related
matters under Investor Relations on its website,
http://www.overstock.com.
O, Overstock.com, O.com, Club O, Main Street
Revolution, and Worldstock are registered trademarks of
Overstock.com, Inc. O.biz and Space Shift are also
trademarks of Overstock.com, Inc. Other service marks, trademarks
and trade names which may be referred to herein are the
property of their respective owners.
This press release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such
forward-looking statements include all statements other than
statements of historical fact. Additional information regarding
factors that could materially affect results and the accuracy of
the forward-looking statements contained herein may be found in the
Company's Form 10-K for the year ended December 31, 2017, which was
filed with the SEC on March 15, 2018, and any subsequent filings
with the SEC.
SOURCE: Overstock.com, Inc.
Media Contact:pr@overstock.com
Investor Contact:ir@overstock.com
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