Feb. 29, 2016—Joe Garrett, Alabama’s deputy revenue commissioner, wants his state to get sued—and the sooner, the better.
Garrett and like-minded officials in South Dakota, Utah and 10 other states are tired of waiting for Congress to write national rules to let them collect sales taxes from out-of-state Internet retailers. So, in a loosely coordinated effort, they are moving to impose those taxes themselves and daring merchants to challenge them.
The gambit is aimed at creating business blowback and a confusing national patchwork of laws that might prompt Congress to act. Short of that, the states want their moves to be questioned legally so they can ask the Supreme Court to overturn a 1992 ruling that forbids taxation of Internet sales by retailers that lack a physical location in a state.
In Alabama, the revenue department began enforcing an old law it says allows taxation of out-of-state sellers. The first taxes were due Feb. 20, and the state plans to audit companies that don’t file returns.
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