High court worries about abandoning online sales tax rule

Legal Compliance

The Supreme Court sounded concerned Tuesday about doing away with a rule that has meant shoppers don't always get charged sales tax when they hit "checkout" online.

The justices were hearing arguments in a case that deals with how businesses collect sales tax on online purchases at sites from Amazon.com to Zappos. Right now, under a decades-old Supreme Court rule, if a business is shipping a product to a state where it doesn't have an office, warehouse or other physical presence, it doesn't have to collect the state's sales tax. Customers are generally supposed to pay the tax to the state themselves if they don't get charged it, but the vast majority don't.

More than 40 states have asked the Supreme Court to abandon its current sales tax collection rule , saying that as a result of it and the growth of internet shopping, they're losing billions of dollars in tax revenue every year.

But several Supreme Court justices suggested during arguments Tuesday that they had concerns about reversing course.

"I'm concerned about the many unanswered questions that overturning precedents will create a massive amount of lawsuits about," Justice Sonia Sotomayor told South Dakota Attorney General Marty Jackley, who was arguing for the court to do away with its current rule.

Chief Justice John Roberts pointed to briefs suggesting the problem of sales tax collection "has peaked" and may be "diminishing rather than expanding." ''Why doesn't that suggest that there are greater significance to the arguments" that the court should leave its current rule in place, he asked.

The fact that Congress could have addressed the issue and has so far hasn't, Justice Elena Kagan said, "gives us reason to pause." Congress can deal with the issue in a more nuanced way than the court, she said, saying Congress is "capable of crafting compromises and trying to figure out how to balance the wide range of interests involved here."

Large retailers such as Apple, Macy's, Target and Walmart, which have brick-and-mortar stores nationwide, generally collect sales tax from their customers who buy online.

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USCIS Issues Clarifying Guidance on NAFTA TN Status Eligibility for Economists

U.S. Citizenship and Immigration Services (USCIS) announced today that it is clarifying policy guidance (PDF, 71 KB) on the specific work activities its officers should consider when determining whether an individual qualifies for TN nonimmigrant status as an economist.

The North American Free Trade Agreement (NAFTA) TN nonimmigrant status allows qualified Canadian and Mexican citizens to temporarily enter the U.S. to engage in specific professional activities, including the occupation of economist. The agreement, however, does not define the term economist, resulting in inconsistent decisions on whether certain analysts and financial professionals qualify for TN status as economists.

TN nonimmigrant status is intended to allow a limited number of professionals and specialists to work temporarily in certain specifically identified occupations in the United States. This updated guidance provides USCIS officers with a specific definition of one such category – economists – allowing them to adjudicate applications in a way that complies with the intent of the agreement. This policy update clarifies that professional economists requesting TN status must engage primarily in activities consistent with the profession of an economist. Individuals who work primarily in other occupations related to the field of economics — such as financial analysts, marketing analysts, and market research analysts — are not eligible for classification as a TN economist.