SCOTUS Decision Levels Food Retail Competition: FMI

The Food Marketing Institute (FMI) greeted with approbation the U.S. Supreme Court’s decision to overturn a 1992 ruling that prevented states from collecting sales tax on remote transactions unless the taxed company has a physical presence in the state.

In the case of South Dakota v. Wayfair, the court voted 5-4 to overturn Quill Corp v. North Dakota, which was handed down when the internet was in its infancy and restricted states’ ability to create tax regimes reflecting the current state of commerce, costing them billions in annual sales tax revenue.

"Quill established two different sets of rules governing the collection of sales taxes that left traditional retailers badly disadvantaged against their online peers," noted Andrew Harig, senior director, tax, trade and sustainability for Arlington, Va.-based FMI. "Today’s ruling sets the stage for states to begin leveling the playing field for brick-and-mortar retailers by treating online transactions in the same way they treat in-person ones."

Added Harig: "The Supreme Court’s decision is an important victory for FMI members and puts us on a path that will allow for the creation of a balanced, consumer-driven and competitive marketplace."

He further noted that the trade group would work with the states and Congress on establishing the terms under which states can collect the sales taxes.