LUBBOCK COUNTY, TX (KCBD) - The Supreme Court heard arguments for South Dakota v. Wayfair on Tuesday morning.
This case challenges a decision made by the court in 1992. Quill Corporation v. North Dakota prevents states from collecting sales taxes from businesses that don't have a significant connection to that state.
Brick-and-mortar businesses argue that online companies have an unfair advantage over them since they don't have to collect sales taxes from consumers. While Amazon already collects sales taxes, they only do so through direct purchases. Third-party vendors on their site don't have to.
While major online retailers such as Amazon and Walmart may not see much of an effect if the Supreme Court decides to overturn the 1992 ruling, smaller online retailers worry what trouble that might cause them.
"Right now it's not that hard. We go through and see everybody that ordered in Texas and we do the math and we know what we collected. But if we do it for everyone at different rates, we would have to keep up with what was collected from every single state to remit all of those to those governments. I think that would be extremely difficult for small businesses to keep up with."
Ashley White, owner of The Polkadot Alley, started the business online but doesn't believe it will have much of an impact on sales.
Aaron Beall, part owner of MotorcycleGear.com, shares those sentiments.
"I don't think that it's really going to affect sales. I would say that it's going to more affect the back end... Having to incorporate each state or counties sales tax into the checkout or the shopping cart is a pretty big endeavor."