STORES Magazine - April 2015 - (Page 8)

n PRESIDENT'S PAGE An Invitation Too Good to Turn Down by MATTHEW R. SHAY T here's a lot to be said for admitting when you're wrong. And U.S. Supreme Court Justice Anthony Kennedy deserves the respect of retailers everywhere for saying last month that the nation's highest court got it wrong nearly 25 years ago in a landmark decision that has left most Internet purchases free of sales tax ever since. Kennedy not only said he and fellow justices came to the wrong conclusion in 1992's Quill Corp. vs. North Dakota ruling, he also invited opponents to file a new case that would give the court a chance to correct its mistake. Quill is the ruling in which the court said a state could not require an out-of-state online merchant to collect sales tax unless the seller had a physical presence like a store, office or warehouse in the customer's state. But Kennedy - who was a member of the court when Quill was handed down and concurred in the unanimous ruling - says the "physical presence" standard was simply lifted from a 1967 case about mailorder sales. He says the justices should have considered a 1977 case that established a "more recent and refined test" of whether tax should be collected. Kennedy said "dramatic technological and social changes" had taken place between 1967 and 1992 and that the argument against exempting Internet purchases from sales tax "has grown stronger and the cause more urgent" since then. With smartphones, tablets and laptops, "a connection to a shopper's favorite store is a click away regardless of how close or far the nearest storefront" and "a business 8 STORES April 2015 may be present in a state in a meaningful way without that presence being physical in the traditional sense of the term," he said. The result has been "extreme harm and unfairness" as Main Street stores compete with untaxed online giants and governments miss out on tax revenue needed to pay for public services. Kennedy's remarks came as the Supreme Court made a procedural ruling in favor of a lawsuit against a Colorado law requiring out-of-state sellers to report untaxed sales so the state can seek the tax money from consumers. He said he was asking for a new case to be filed because the issues in the Colorado case were not broad enough to let the court fully reconsider the sales tax issue. For years, NRF has argued that "only Congress" can fix the sales tax loophole, working on the premise that the Supreme Court's position was settled. While congressional action would offer the simplicity of a single nationwide solution, Kennedy's change of heart opens a new option: The loophole could be fixed by the very court that created it. Congress has failed to pass sales tax fairness legislation despite a bill being introduced in every session for more than a dozen years, so maybe it's time to argue the issue in court again. An invitation like this doesn't come every day, and is far too good to ignore. STORES is published by NRF Enterprises Inc., a subsidiary of National Retail Federation Inc., 1101 New York Avenue, NW Suite 1200 Washington, D.C. 20005. 202/783-7971 FAX 202/737-2849 CHAIRMAN OF THE BOARD Kip Tindell, Chairman and CEO, The Container Store VICE CHAIRWOMAN Mindy Grossman, CEO, HSNi PRESIDENT & CEO Matthew R. Shay EXECUTIVE VICE PRESIDENT & COO Carleen C. Kohut SENIOR VICE PRESIDENTS Vicki Cantrell, Communities Ellen Davis, NRF Foundation Mallory B. Duncan, General Counsel David French, Government Relations Michael G. Gatti, Member Relations Susan Newman, Conferences Bill Thorne, Communications & Public Affairs NRF DIVISIONS EXECUTIVE DIRECTOR Tom Litchford 202/626-8126 EXECUTIVE DIRECTOR Rob Green 202/626-8187 EXECUTIVE DIRECTOR Vicki Cantrell 202/626-8195 1101 New York Avenue, NW Suite 1200 Washington, D.C. 20005 All articles published in this magazine represent solely the individual opinions of the writers, and not necessarily those of the National Retail Federation. NRF.COM/STORES http://www.SHOP.ORG http://www.NRF.COM/STORES

Table of Contents for the Digital Edition of STORES Magazine - April 2015

A Most Complex Game
It's All Connected
Retail People
Selling Satisfaction
Editor's Page
President's Page
Retail Politics
NRF News
NRF Communities Update
End Cap
Business Operations
Online Fraud

STORES Magazine - April 2015