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Supreme Court Says States Can Now Collect Sales Tax From All Online Retailers

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WASHINGTON, June 21, 2018 – The United States Supreme Court on Thursday dealt a blow to the online retail industry by overturning a 26-year-old ruling, Quill v. North Dakota, which had prohibited states from forcing mail-order retailers to collect sales tax from customers in states where they lacked a physical presence.

The 5-4 ruling on Thursday, in South Dakota v. Wayfair, means customers of online retailers like Amazon will no longer be able to avoid paying their state’s sales tax, and those retailers – which are now some of the largest in the United States – will no longer enjoy an advantage over their brick-and-mortar competitors.

The case could put an end to years of non-stop growth by online-only retailers like Amazon, which many small business owners claim came at their own expense, costing Americans their jobs as the brick-and-mortar retail industry has contracted in the face of online competition.

The decision could provide a needed boost the state and local governments that have long complained that the inability to collect sales tax from online retailers has caused their sales tax revenue to plummet as consumers have increasingly stayed home for even the most basic shopping needs.

Trump weighs in

President Trump took to his Twitter account late Thursday to applaud the ruling.

“Big Supreme Court win on internet sales tax – about time! Big victory for fairness and for our country. Great victory for consumers and retailers,” he wrote.

Trump, who initially entered the public consciousness as a real estate developer, has often suggested that Amazon — the United States’ largest online retailer  — was gaining an unfair advantage over brick-and-mortar merchants from the rules under which online retailers operated until today.

“Unlike others, [Amazon] pay little or no taxes to state & local governments,” Trump wrote in a March 29 tweet attacking Amazon and The Washington Post, which is owned separately by Amazon founder Jeff Bezos.

During his campaign for the presidency, Trump often suggested that Bezos had purchased the Post in order to influence legislation to prevent Amazon from having to pay sales taxes.

Trump’s assertions regarding Amazon and state sales taxes have no connection to reality, as Amazon has paid sales taxes in states which require it for a number of years.

While the president suggested that the ruling would help small businesses, Steve DelBianco, president and CEO of the free-market advocacy group NetChoice, explained that Thursday’s court ruling would actually hurt the small business of which Trump has styled himself a champion.

“While a fraction of online commerce was free of sales tax before this ruling, the Supreme Court has now created an even greater imbalance by placing far greater burdens on Internet shopping compared to its “offline” counterparts,” said DelBianco, whose group has long opposed allowing states to require online retailers to pay sales tax absent a physical presence in a given state.

DelBianco explained that now that Supreme Court has “legislated from the bench,” small online merchants have their “already razor-thin profit margins” cut even further, while brick-and-mortar remain unaffected.

“When these businesses disappear, consumers will be the biggest losers,” he said.

Former Congressman Chris Cox, the group’s outside counsel and author of the Internet Tax Freedom Act, said the court’s decision will do the most harm to small online retailers and those with a single location, “because they can’t afford the overhead to comply with thousands of different tax rules across the country.”

Cox predicted that many small online retailers would be forced to close their doors or be bought out by online retail giants.

“The last hope for consumers and small online business owners is for Congress to take action.  It should be Congress, not the courts, that sets the rules for interstate sales tax collection,” he added.

Andrew Feinberg was the White House Correspondent and Managing Editor for Breakfast Media. He rejoined BroadbandBreakfast.com in late 2016 after working as a staff writer at The Hill and as a freelance writer. He worked at BroadbandBreakfast.com from its founding in 2008 to 2010, first as a Reporter and then as Deputy Editor. He also covered the White House for Russia's Sputnik News from the beginning of the Trump Administration until he was let go for refusing to use White House press briefings to promote conspiracy theories, and later documented the experience in a story which set off a chain of events leading to Sputnik being forced to register under the Foreign Agents Registration Act. Andrew's work has appeared in such publications as The Hill, Politico, Communications Daily, Washington Internet Daily, Washington Business Journal, The Sentinel Newspapers, FastCompany.TV, Mashable, and Silicon Angle.

Courts

Supreme Court’s EPA Decision Unlikely to Significantly Affect Federal Communications Commission

But landmark administrative law ruling could add more burden on agency in justifying decisions.

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Photo of Free State Foundation President Randy May courtesy the foundation

WASHINGTON, July 7, 2022 – The Federal Communications Commission is unlikely to be affected by a Supreme Court decision last week that limits the scope of decision-making by agencies on certain matters, but it could add to the commission’s task of proving that their decisions are in-line with the laws they administer, experts told Broadband Breakfast.

The June 30 high court ruling found, in West Virginia v. EPA, that the Environmental Protection Agency has limited regulatory authority, and that Congress alone has the power to decide on “major questions” of “vast economic or political significance.” The court effectively decided in favor of the so-called “major questions” doctrine, a conservative legal theory that seeks to maintain separation of powers by allocating “major questions” as the responsibility of Congress alone.

In turn, that theory contrasts with but does not explicitly overrule the still-valid doctrine known as Chevron deference. Chevron deference holds that where federal agencies are given legislative delegation by Congress, they are allowed reasonable interpretation of that authority.

Several experts are concerned, according to Protocol, that the ruling could affect the plans of tech regulators to implement laws under their jurisdiction. FCC Chairwoman Jessica Rosenworcel recently reaffirmed her support for net neutrality rules to prevent internet service providers from slowing or blocking web traffic, and supporters fear that the EPA decision could prevent further action at the FCC.

But experts Broadband Breakfast spoke to don’t exactly see it that way for the commission.

Chevron deference ‘increasingly in eclipse.’

“Ninety-eight percent of the decisions that the FCC makes – at least – are not going to be considered major question cases if they ever get to review,” Randolph May, founder and president of the Free State Foundation, said in an interview with Broadband Breakfast, adding that the doctrine of Chevron deference (after the 1984 Supreme Court decision Chevron v. Natural Resources Defense Council) is “increasingly in eclipse.”

Meanwhile, Harold Feld, senior vice president of internet advocacy group Public Knowledge, also told this publication that while, “I don’t think the major question doctrine applies to much of what the FCC does.”

It may, however, have an impact on the timeliness of the agency, including any decision it makes on net neutrality, he said.

Harold Feld

There will be an additional need to prove that the actions of the agency are in line with not merely a reasonable interpretation of the statutory authority but also consistent with previous practices, he said.

Agencies must also consider “how expansive is [a statute] really until it becomes a major question that Congress has to be even more specific about.”

The impact for agencies in the lower courts must also be considered, continued Feld. For decades, Chevron deference has been the standard in the courts. It allows for agencies to have a framework to determine how lower courts will analyze cases, he said. The undermining of Chevron deference will bring back the “wacky uncertainty that caused the Supreme Court to implement Chevron in the first place.”

The ambiguity that results from the ruling may have a greater impact on the Federal Trade Commission, Feld said. “It is clear that Congress intended the FTC to do rulemaking, but it is also clear that they haven’t done it before,” Feld explained. “So do they need special authorization from Congress now?”

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Courts

Supreme Court Declares Trump First Amendment Case Moot, But Legal Issues For Social Media Coming

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Photo of Justice Clarence Thomas in April 2017 by Preston Keres in the public domain

April 5, 2021—Despite accepting a petition that avoids the Supreme Court deliberating on whether a president can block social media users, Justice Clarence Thomas on Monday issued a volley that may foreshadow future legal issues surrounding social media in the United States.

On Monday, the Supreme Court sent back to a lower court and ruled as moot a lawsuit over whether former President Donald Trump could block followers on Twitter, after accepting a petition by the federal government to end the case because Trump wasn’t president anymore.

The case dates back to March 2018, when the Knight First Amendment Institute and others brought a case against former president Trump in the Southern District of New York for blocking users based on their political views, arguing the practice is a violation of the first amendment.

The lower court judge agreed, and the decision was upheld by the United States Court of Appeals.

In accepting the petition by the government, Justice Thomas stated that adjudicating legal issues surrounding digital platforms is uniquely difficult. “Applying old doctrines to new digital platforms is rarely straightforward,” he wrote. The case in question hinged on the constitutionality of then-President Trump banning people from interacting with his Twitter account, which the plaintiff argued was a protected public forum.

Thomas stated that while today’s conclusion was able to be vacated, that likely would not be the case in the future. He went on to say that digital platforms exercise “concentrated control of so much speech in the hands of a few private parties.”

He continued: “We will soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure such as digital platforms.”

Even though Facebook and Google were not the platforms in question in this case, Thomas pointed to them as “dominant digital platforms” and stated that they have “enormous control over speech.” He stated that Google, Facebook, and Twitter have the capabilities to suppress information and speech at will, and referenced the “cataclysmic consequences” for authors that Amazon disagrees with.

Thomas also rejected the notion that other options exist.

“A person always could choose to avoid the toll bridge or train and instead swim the Charles River or hike the Oregon Trail. But in assessing whether a company exercises substantial market power, what matters is whether the alternatives are comparable.”

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Broadband News

The Supreme Court Finally Says It Won’t Reconsider Old Net Neutrality Case

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BROADBAND BREAKFAST INSIGHT: Talk about finally letting the other shoe drop! On Monday, the Supreme Court, on a 4-3 vote (with two of the conservatives justices recusing themselves) refused to consider the old net neutrality case – the one lodged by the Obama administration, and which put extensive net neutrality regulations into effect. Those rules, affirmed by the D.C. Circuit Court of Appeals, were arguably moot because of Federal Communications Commission Chairman Ajit Pai’s December 2017 re-write of these rules. But the case lingered on and on and on.

Divided court denies review in “net neutrality” cases, from SCOTUSblog:

This morning the Supreme Court issued orders from the justices’ private conference on Friday. The justices did not add any new cases to their docket for the term – they did that on Friday afternoon – nor did they call for the views of the U.S. solicitor general in any cases. But one order today in particular was significant: The justices declined to review a decision by the U.S. Court of Appeals for the District of Columbia Circuit upholding the Obama administration’s “net neutrality” rules, which (generally speaking) required internet service providers to treat all traffic on the internet equally.

The rules, which were issued in 2015, have since been replaced by a 2018 order by the Federal Communications Commission eliminating net neutrality, so the justices were not expected to weigh in on the merits of these cases. Instead, the real question was the fate of the D.C. Circuit’s decision upholding the rules: Would the Supreme Court allow it to stand – which would mean that it could serve as precedent for future cases – or would the justices instead invalidate the D.C. Circuit’s decision and send it back with directions to dismiss the cases as moot (a doctrine known as Munsingwear vacatur), because the net neutrality rules are no longer in effect?

Today, over a year after the petitions seeking review of the D.C. Circuit’s decision were filed, a divided Supreme Court simply declined to consider the cases, leaving the D.C. Circuit’s decision in place. The court’s newest justice, Brett Kavanaugh, was expected to recuse himself from voting on the petitions because he had participated in the cases while on the D.C. Circuit, and he did. But Chief Justice John Roberts also recused himself – presumably (although there is no way to know for sure) because he owns stock in one of the companies challenging the rules.

[more…]

Source: Divided court denies review in “net neutrality” cases – SCOTUSblog

(Photo of Supreme Court by Joe Ravi used with permission.)

See also: https://broadbandbreakfast.com/2018/03/supreme-court-against-extends-deadline-in-berninger-v-fcc-the-old-net-neutrality-case/

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