Congress Members Call for High Court Review of Digital Tax Case

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By Ryan Prete

A bipartisan coalition of U.S. senators and representatives is the latest group to urge the U.S. Supreme Court to accept South Dakota’s petition seeking review of a 25-year-old opinion restricting states’ authority to tax out-of-state sellers.

Brian Kirkell, a Washington-based principal at RSM US LLP, told Bloomberg Tax that he wasn’t surprised by the brief and said it acknowledges Congress’ reliance on the high court to solve the digital sales tax dispute.

“It’s definitely unique for Congress to reach out to the Supreme Court, and it adds yet another group to this mounting pile of amicus briefs. But still, when it comes down to it, you’re going to need those four justices to show interest in the case. That’s the only way this moves forward,” he told Bloomberg Tax.

The Nov. 2 friend-of-the-court brief was submitted by Senators Michael Enzi (R-Wyo.), Heidi Heitkamp (D-N.D.), Richard Durbin (D-Ill.) and Lamar Alexander (R-Tenn.) and Representatives Kristi Noem (R-S.D.) and John Conyers, Jr. (D-Mich.). The lawmakers support South Dakota Attorney General Marty Jackley’s (R) petition for review of a Sept. 13 state Supreme Court ruling that found the state’s “economic nexus” law, S.B. 106 (codified as S.D. Codified Laws Chapter 10-64), unconstitutional under Quill Corp. v. North Dakota—the 1992 U.S. Supreme Court ruling that prohibits states from imposing sales and use tax collection obligations on vendors without a physical presence in-state ( South Dakota v. Wayfair, Inc. , U.S., No. 17-494, friend-of-the-court brief filed 11/2/17 ).

The members of Congress behind the brief aren’t new to the digital sales tax scene.

Enzi is sponsor of the Marketplace Fairness Act of 2017 (MFA) (S.976) and Noem is sponsor of the Remote Transactions Parity Act of 2017 (RTPA) (H.R. 2193)—both of which would widen the reach of states’ taxing authority over remote retailers. The other lawmakers are co-sponsors on their respective chamber’s bill.

The MFA and RTPA are pending and haven’t received a vote in Congress. The No Regulation Without Representation Act of 2017 (NRRA) (H.R. 2887), a competing measure that would codify Quill, is also pending in Congress. A House Judiciary subcommittee heard testimony on the NRRA during a July hearing, but there has been no floor vote.

Congressional Inaction

Joe W. Garrett Jr., deputy commissioner of revenue with the Alabama Department of Revenue, was pleased with the brief.

“I’m extremely encouraged by the support evidenced by all the amici. The support from congressmen touches on what I believe to be the key stumbling block to change, which is not whether the physical presence rule should go, but who should make the change—SCOTUS or Congress,” he told Bloomberg Tax.

“Here you have congressmen asking the court to take the case, acknowledging that Congress is not about to solve the problem on its own,” Garrett said.

Jamie Yesnowitz, principal and state and local tax practice and National Tax Office leader at Grant Thornton LLP, echoed the belief that Congress is openly relying on the U.S. Supreme Court to settle the nationwide digital tax issue.

“It’s somewhat telling when current members of Congress who have been integrally involved in the effort to enact remote seller legislation are reaching out to the U.S. Supreme Court through an amicus brief to essentially say, ‘Look at the history of Congressional inaction on this issue—don’t wait for Congress to act first,’” he told Bloomberg Tax in an email.

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To contact the editor responsible for this story: Cheryl Saenz at

For More Information

Text of the brief is at

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