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JA Calls Supreme Court Decision a ‘Major Victory for Jewelers on E-Fairness’

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(PRESS RELEASE) NEW YORK – Jewelers of America applauds the decision by the United States Supreme Court to uphold South Dakota’s sales tax fairness law and overturn the 1992 decision in Quill Corp. v. North Dakota. By a vote of 5-4, the Court struck down the earlier judgement, which established the current system under which states are prohibited from collecting sales and use taxes from sellers that do not have a physical presence in-state that led to the current uneven playing field between traditional and online sellers. The decision will enable states to pass laws that require remote retailers to collect sales tax, even if they do not have a physical presence in the state.

Jewelers of America is a longtime proponent of sales tax fairness, advocating on the jewelry industry’s behalf in support of efforts to enact legislation on federal and state levels for decades.

“This historic decision from the Court in support of sales tax fairness is a major victory for the jewelry industry, providing a clear path to level the playing field between traditional and online retailers,” says David J. Bonaparte, JA President & CEO. “Now Congress must respond by passing federal legislation to create a universal federal framework for sales and use tax collection in a way that benefits businesses regardless of the state where their business resides and avoids a patchwork of state-by-state laws.”

The Court heard oral arguments on April 17 on South Dakota v. Wayfair. At issue was South Dakota’s sales tax fairness law, which had been ruled unconstitutional by the South Dakota Supreme Court last September. It requires online merchants with more than $100,000 in annual sales to state residents or 200 transactions with state residents to collect sales tax. JA supported South Dakota’s petition and arguments to the Court, signing on with other retail organizations to file legal briefs last October and again in March.

In October, JA Members were featured prominently in an amicus brief — filed with nine other retail trade associations — in support of South Dakota’s petition. They shared stories and information on how the practice of “showrooming” — visiting a store in order to examine a product before buying it online at a lower price or without sales tax — has negatively impacted jewelry businesses. Then in March, JA joined an omnibus brief — spearheaded by the Retail Litigation Center — that addressed the outsized negative impact that the Quill decision has had on brick-and-mortar retailers.

Even with the Court’s favorable decision, JA will continue to push Congress to pass federal legislation in order to create a universal federal framework for sales and use tax collection, versus a state-by-state solution. The issue was a focus of meetings with Congressional leaders during JA’s annual fly-in to Washington, DC, held June 20.

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