The United State Supreme Court handed down a decision in a case we have been closely following and, in California, have helped drive much of the discussion. The South Dakota v. Wayfair decision overturns the outdated Quill decision from 1992 and clears the way for states to collect sales taxes from retailers that do not have a physical presence in their state.

This is a massive win for companies that own buildings that provide shopping services to the public and corrects a decades-long loophole that allowed online retailers to avoid charging sales tax just like physical retailers, which created a perverse incentive to not build in certain states.

At the national level we congratulate both International Council of Shopping Centers and the Retail Industry Leaders Association (RILA) for their years of dogged work on this issue.

Tom McGee, President & CEO, ICSC, stated, “Today was an historic and important day for our industry. The United States Supreme Court ruled in favor of overturning the outdated standard set in of the 1992 Quill decision that prevented states from collecting sales tax for online purchases. The decision in South Dakota v. Wayfair was 5-4, and signaled that the justices recognized the need to bring the law into the 21st century.

“This is a critical step in leveling the playing field between brick-and-mortar retailers and online-only sellers. ICSC has been actively engaged in this issue for more than a decade, aggressively advocating for sales tax fairness on our members’ behalf. More recently, we led the real estate amicus brief in support of the tax law passed by the State of South Dakota.

“The victory means that state’s rights have been restored and they will now be allowed to implement sensible laws to collect the sales tax they depend on. The next step is for state and federal lawmakers to create formal tax policy that supports fairness and ICSC will continue to be actively involved on this front.

“We are pleased with the court’s ruling and knowing that the free market principles that are central to America’s economic system can once again be applied fairly to retailers across the country.”

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