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On Tuesday, July 24, the House Judiciary Committee held a hearing on "Examining the Wayfair Decision and its Ramifications for Consumers and Small Businesses." The Supreme Court's holding in Wayfair overturned a 26-year precedent, and it gives states the ability to require that some online retailers charge and remit sales tax on purchases made by residents, even absent a physical presence within the state. This is a positive step in the direction of leveling the playing field between brick-and-mortar retailers - customers of commercial real estate professionals - and e-commerce sites. NAR sent a letter thanking the Committee for its attention to this issue, and reiterating support for leveling the playing field between online and brick-and-mortar retailers via internet sales tax fairness policies.
The hearing, overseen by Chair Goodlatte (R-VA) and Ranking Member Nadler (D-NY), had panel of witnesses including small business owners, tax policy experts, and representatives from the National Retail Federation, the National Conference of State Legislatures, and the MultiState Associates, Inc. Questions focused on the post-Wayfair landscape, including potential burdens to small online businesses and limitations of the ruling itself. Several witnesses pointed out that software is available that can calculate sales tax on purchases down to the zip code, and that most states are waiting until January 2019 to change their current sales tax laws, to reduce confusion on tax filings. Congressman Cicilline (D-RI), the Ranking Member of the Subcommittee on Regulatory Reform, Commercial and Antitrust Law, clarified in his closing statement that the Wayfair ruling does not create a new tax - it simply gives authority to states to collect a tax already owed.