U.S. Supreme Court hears oral arguments on Internet sales tax case

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WASHINGTON (Gray DC) -- Will online shoppers be pushed to pay sales tax at check-out? That’s the question the U.S. Supreme Court is taking up - and it all stems from a South Dakota law.

“Washington isn’t solving the problems," said Marty Jackley, South Dakota Attorney General (R).

"That’s why we’re standing at the United States Supreme Court: to have the Court set that level playing field - for all businesses, across South Dakota and the nation."

Jackley says it’s only fair online businesses charge the the same sales tax as traditional brick-and-mortar stores.

Tuesday he made his case to the nation's top court.

Jackley is defending a law that requires Internet businesses collect sales tax when shipping products to South Dakota customers.

He - and other supporters of the law - argue states lose out on billions of dollars for vital projects - like roads, schools and hospitals.

“Congress has had 26 years to act, and they haven’t," said Jackley.

Several justices seemed concerned about overturning decades of precedent, arguing if action is to be taken it should be done by Congress.

“I think they were really sensitive to the disruption of the market that it could happen if the Court were to reverse its precedent," said George Isaacson, who is representing online businesses, like Wayfair and Overstock.

Isaacson argued before the Court that South Dakota’s law would put too much burden on small to mid-sized businesses and that it’s too daunting and expensive for those merchants to keep up with thousands of different rules going state to state.

“I think literally what’s on the line is the health of e-commerce," said Isaacson.

Justices Sotomayor and Breyer asked probing questions of whether small businesses could keep up with the costs of additional regulations.

But leading up to Tuesday’s hearing - three justices - Gorsuch, Thomas and Kennedy - have written about a willingness to reconsider a 1992 Court ruling.

A decision in this case is expected by the end of June.

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