FinancialsMay 15, 2024
Brilliant Earth’s Sales Fall Flat in Q1 While overall sales were sluggish, the retailer said its non-bridal fine jewelry was a popular choice for Valentine’s Day.
Policies & IssuesJun 22, 2018
SCOTUS: States Can Make Online Sellers Collect Sales Tax
The Supreme Court voted to overturn Quill, which makes way for states to begin collecting sales tax from online merchants.
The Supreme Court ruled 5-4 to overturn Quill, the 1992 ruling that barred states from collecting sales tax from sellers that do not have a physical presence in the state.
Washington--The U.S. Supreme Court has made way for states to begin collecting sales tax from all online sellers by overturning a decision made when only 2 percent of Americans had internet access and mail-order catalogs were king.
Quill Corp. v. North Dakota (1992), which barred states from collecting sales tax from sellers that do not have a physical presence in the state, was overturned by a vote of 5-4, the court announced Thursday morning.
Justice Anthony M. Kennedy authored the concurring opinion, joined by Justices Ruth Bader Ginsberg, Samuel A. Alito Jr., Neil M. Gorsuch and Clarence Thomas.
“Quill puts both local businesses and many interstate businesses with physical presence at a competitive disadvantage relative to remote sellers,” he wrote. “Remote sellers can avoid the regulatory burdens of tax collection and can offer de facto lower prices caused by the widespread failure of consumers to pay the tax on their own.”
(When consumers buy an item online and do not pay sales tax at the time of the purchase they are required by law to report and pay it when they do their annual income taxes, though hardly any do so.)
“In effect,” the concurring opinion continues, “Quill has come to serve as a judicially created tax shelter for businesses that decide to limit their physical presence and still sell their goods and services to a state’s consumers—something that has become easier and more prevalent as technology has advanced.”
Chief Justice John Roberts and Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented, with Roberts stating that while e-commerce has grown into a “significant and vibrant” sector of the economy, the changing of the physical presence rule ultimately should be left up to Congress.
He noted the costs this decision will impose on retailers of all sizes, as they grapple with how to navigate the web of complex tax laws that vary from jurisdiction to jurisdiction.
“The burden will fall disproportionately on small businesses,” Roberts wrote in the dissenting opinion. “One vitalizing effect of the internet has been connecting small, even ‘micro,’ businesses to potential buyers across the nation. People starting a business selling their embroidered pillowcases or carved decoys can offer their wares throughout the country—but probably not if they have to figure out the tax due on every sale.”
The Supreme Court decision to overturn Quill is seen as a victory by many brick-and-mortar sellers
Editors' Picks
Sponsored by
including jewelers, who have long complained about having to compete with sellers who don’t have to charge sales tax.
On Thursday, both Jewelers of America and the National Retail Federation issued statements lauding the Supreme Court’s decision, though both noted the need for congressional action to follow.
“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,” JA President and CEO David J. Bonaparte said. “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.”
NRF CEO Matthew Shay called the decision a “major victory” but said Congress must now follow the court’s lead and pass legislation implementing uniform, national rules that “provide consistency and clarity for retailers across the country.”
JA, which just held its annual fly-in in which it brings jewelers to meet with Congressional leaders, said it will continue to push Congress to pass federal legislation for sales tax collection.
The chance to revisit and overturn Quill came to the Supreme Court earlier this year after the state of South Dakota, which estimates that it loses $48-$58 million a year due to uncollected taxes from online sales, asked the court to reconsider the two decades-old decision.
Overstock.com, one of the online retailers that battled South Dakota over the issue, issued a statement following Thursday’s ruling indicating it would comply but called on Congress to step in and legislate a “fair solution.”
“Today the U.S. Supreme Court has re-shaped the interstate commerce landscape in a move that could impact small business innovation on the internet, which has been a driving force behind our nation’s economy for the last 15 years,” said Jonathan Johnson, an Overstock.com executive and board member.
“The framers of the Constitution intended Congress to regulate interstate commerce by thoughtful legislation. To lessen the potential impact of today’s ruling on internet innovation, Congress can, and should, pass sound legislation allowing states to accomplish their aims while still permitting small internet business to thrive.”
The full opinion can be found on SupremeCourt.gov.
Editor’s note: The story was updated post-publication to include a statement from Overstock.com, which was received after the story was published.
On Thursday, both Jewelers of America and the National Retail Federation issued statements lauding the Supreme Court’s decision, though both noted the need for congressional action to follow.
“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,” JA President and CEO David J. Bonaparte said. “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.”
NRF CEO Matthew Shay called the decision a “major victory” but said Congress must now follow the court’s lead and pass legislation implementing uniform, national rules that “provide consistency and clarity for retailers across the country.”
JA, which just held its annual fly-in in which it brings jewelers to meet with Congressional leaders, said it will continue to push Congress to pass federal legislation for sales tax collection.
The chance to revisit and overturn Quill came to the Supreme Court earlier this year after the state of South Dakota, which estimates that it loses $48-$58 million a year due to uncollected taxes from online sales, asked the court to reconsider the two decades-old decision.
Overstock.com, one of the online retailers that battled South Dakota over the issue, issued a statement following Thursday’s ruling indicating it would comply but called on Congress to step in and legislate a “fair solution.”
“Today the U.S. Supreme Court has re-shaped the interstate commerce landscape in a move that could impact small business innovation on the internet, which has been a driving force behind our nation’s economy for the last 15 years,” said Jonathan Johnson, an Overstock.com executive and board member.
“The framers of the Constitution intended Congress to regulate interstate commerce by thoughtful legislation. To lessen the potential impact of today’s ruling on internet innovation, Congress can, and should, pass sound legislation allowing states to accomplish their aims while still permitting small internet business to thrive.”
The full opinion can be found on SupremeCourt.gov.
Editor’s note: The story was updated post-publication to include a statement from Overstock.com, which was received after the story was published.
More on Policies & Issues
The Latest
AuctionsMay 15, 2024
Red Diamond Breaks Records at Phillips Geneva“The Argyle Phoenix” sold for more than $4 million at the auction house’s second jewels sale.
Events & AwardsMay 15, 2024
See Who’s in JA’s 2024 ‘20 Under 40’ ClassThe annual list recognizes young professionals making an impact in jewelry retail.
Brought to you by
Record Gold Prices Have Consumers Undeterred. Here’s Why.Despite the rising prices, consumers continue to seek out the precious metal.
ColumnistsMay 15, 2024
Squirrel Spotting: Why Retailers Struggle to Fire BrandsWhy do so many jewelers keep lines that are not selling? Peter Smith thinks the answer lies in these two behavioral principles.
Weekly QuizMay 09, 2024
This Week’s QuizTest your jewelry news knowledge by answering these seven questions.
IndependentsMay 15, 2024
David Mann Jewelers in Upstate NY to Close After 35 YearsOwner David Mann is heading into retirement.
SourcingMay 14, 2024
Anglo American Confirms It Is Looking to Sell De Beers The mining giant also wants to offload its platinum business as part of an overhaul designed to “unlock significant value.”
Brought to you by
From Registration to Return: 10 Tips to Protect You Before, During and After a TradeshowTradeshow risks are real. Get tips to protect yourself before, during and after and gain safety and security awareness for your business.
AuctionsMay 14, 2024
2 Huge Yellow Diamonds Are Heading to AuctionChristie's is selling one of the diamonds, moving forward with its Geneva jewelry auction despite the cyberattack that took down its website.
MajorsMay 14, 2024
Platinum Born Taps ‘Born Leaders’ for New CampaignThe ad aims to position platinum jewelry as ideal for everyday wear.
GradingMay 14, 2024
Instappraise Adds Trifold Brochure to Appraisal OfferingsRetailers can customize and print the appraisal brochures from their store.
Lab-GrownMay 13, 2024
Lab-Grown Diamond Brand Lightbox Cuts Prices by 25 to 40%The move follows a price-drop test run in Q4 and comes with the addition of a “quality assurance card” from GIA for some loose diamonds.
TechnologyMay 13, 2024
Christie’s Website Brought Down by Hackers, Watch Auction Postponed The site has been down since Thursday evening, just ahead of its spring auctions.
AuctionsMay 13, 2024
Madeleine Albright’s Jewelry, Pins a White-Glove Sale at Freeman’s | HindmanThe late former U.S. Secretary’s collection went for quadruple the sale’s pre-sale estimate.
IndependentsMay 13, 2024
Zachary’s Jewelers Names Mother’s Day Jewelry Contest WinnersThree fifth graders’ winning designs were turned into custom jewelry pieces in time for Mother’s Day.
IndependentsMay 10, 2024
Frank Adams Jewelers Names New CEOKimberly Adams Russell is taking over the role from her father, David Adams, marking the third generation to hold the title.
CollectionsMay 10, 2024
Piece of the Week: Carina Hardy’s ‘Birth of Venus’ NecklaceAs a token of womanhood, this necklace depicts when Venus was born from the sea.
MajorsMay 09, 2024
Watches of Switzerland Pays $130M for Roberto Coin Inc.The deal gives the retailer control over the distribution of Roberto Coin jewelry in the U.S., Canada, Caribbean, and Central America.
TrendsMay 09, 2024
Amanda’s Style File: Shine Bright, Moms Show your mother some love with a piece of fine jewelry.
IndependentsMay 09, 2024
Kyle Edward Fine Jewelry to Close Salisbury StoreThe company’s Easton location will remain open.
MajorsMay 09, 2024
JBT Elects New ChairmanBrian D. Fleming of Carla Corporation was elected to serve a one-year term in the role.
Supplier BulletinMay 08, 2024
Fusing Past and Present at the Las Vegas Antique Jewelry & Watch ShowSponsored by the Las Vegas Antique Jewelry and Watch Show
EditorsMay 07, 2024
Q&A: Author Vikki Tobak on the ‘Ice-Cold’ ExhibitionTobak, author of “Ice Cold: A Hip-Hop Jewelry History,” shares how the exhibition came to be, and the pieces people may be surprised to see.
EditorsMay 07, 2024
10 On-Theme Looks from the 2024 Met GalaStars adorned themselves in emeralds, platinum, and myriad bird motifs, writes Associate Editor Natalie Francisco.
IndependentsMay 07, 2024
112-Year-Old New Orleans Business Popping Up in Aspen M.S. Rau is set to open a seasonal gallery in the high-end resort town early next month.
MajorsMay 07, 2024
Richemont Acquires Italian Jeweler VhernierThe branded jewelry market is thriving, said Richemont Chairman Johann Rupert.
CollectionsMay 07, 2024
These ‘Luminaries’ Are Set to Light Up CoutureThe six designers, all participants in the show’s Diversity Action Council mentorship program, will exhibit in Salon 634.
