Senator Heidi Heitkamp United States Senator for North Dakota

Press Releases

Jun 21 2018

In Huge Win for Small Businesses and ND, Supreme Court Overturns Ruling in 1992 Case Heitkamp Led as ND’s Tax Commissioner

Senator: After 26 Years and Roadblocks in Congress, Court Makes Right Decision for North Dakota Small Businesses

WASHINGTON, D.C. – U.S. Senator Heidi Heitkamp today hailed the U.S. Supreme Court’s ruling that states have the ability to require online retailers to collect sales tax, an issue she has been fighting for since she brought Quill v North Dakota before the Court as North Dakota’s tax commissioner in 1992. The Court did not rule favorably at the time, but today’s decision in South Dakota vs Wayfair, Inc. overturns the Court’s ruling in Quill and finally levels the playing field for brick-and-mortar businesses in North Dakota and around the country. The ruling will also help increase state revenues, adding much needed resources that can support critical investments in education, infrastructure and other state projects.   

Heitkamp attended oral arguments in Quill in 1992, and earlier this year attended oral arguments for Wayfair. Last November, Heitkamp led a bipartisan group of senators in submitting an amicus brief to the Court, urging the Court take up South Dakota v Wayfair, Inc. in an effort to overturn Quill v North Dakota. After the Court agreed to take up the case, Heitkamp led a bipartisan group of senators in filing a brief urging the Court to overturn its decision in Quill v North Dakota.  

“This decision is a huge victory decades in the making for our brick and mortar businesses in North Dakota,” Heitkamp said. “It’s a victory I’ve been fighting for since 1992, when as North Dakota’s Tax Commissioner I brought a case before the Court to try to settle this issue. Today’s decision is a shot of energy for the brick-and-mortar retailers and small businesses that will now be able to compete on equal terms with out of state online sellers. It’s also a huge boost to our state revenues which will mean millions of dollars in additional resources that can go towards critical investments that will grow our state economy. After two and a half decades and an effort I led in Congress to remedy the situation, this is a great day for North Dakota businesses and families.”

Heitkamp led a bipartisan legislative effort to settle the issue of online retailers gaining an unfair advantage over brick-and-mortar businesses by not having to collect state sales and use taxes, but after 26 years and roadblocks in the U.S. House of Representatives, she pushed for a Court decision to give clarity on the issue. The Marketplace Fairness Act, which she helped introduce, passed in the Senate in 2013. 

In Quill v North Dakota, Heitkamp fought to allow the state of North Dakota to make catalog retailers collect the sales and use taxes the state and municipalities were already owed. The court ruled against North Dakota, deciding that a business must have a physical presence in a state before it can be required to collect and remit state sales and use taxes.

Since then, the sharp increase in internet sales has sparked renewed interest from state and local governments in leveling the playing field for brick-and-mortar businesses and closing a gaping loophole in our tax system. It is estimated that North Dakota loses upward of $35 million in revenue per year because of the loophole, and in 2015 alone, the total uncollected sales and use taxes in the U.S. was nearly $26 billion. Retailers without a physical presence have a price advantage over brick-and-mortar businesses of up to 8.5 percent in North Dakota.

Heitkamp helped introduce the Marketplace Fairness Act in 2013, one of the first bills she introduced as a senator. The legislation would give states the right to require out-of-state businesses or online retailers to collect and remit the sales and use taxes that are already owed under current law. The Senate passed the Marketplace Fairness Act in a bipartisan vote of 69-27, but the legislation was not taken up in the House of Representatives. Last year, Heitkamp and a bipartisan group of senators reintroduced the Marketplace Fairness Act, but congress has not acted, one of the reasons Heitkamp urged the Court to decide on the issue. 



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