Why South Dakota v. Wayfair Could Hit Mom-and-Pop Stores

June 18, 2018

By Michael Teich

A landmark e-commerce case being decided by the Supreme Court could have a big impact on mom-and-pop retailers trying to compete with the likes of Amazon, Overstock, and Wayfair.

The nation's highest court is expected to rule in the coming days on whether states can collect sales taxes on residents' online purchases. And a decision in favor of states could put smaller shops at a disadvantage if they too are forced to pay up, said Melissa Armo, owner of The Stock Swoosh.

“It's hard for any small business to compete with these stores,” she said in an interview with Cheddar.

Currently, the law states that retailers are not required to collect sales taxes from consumers unless they have a brick-and-mortar store in the state where that shopper resides. Those rules stem from a 1992 case applying to mail-order retailers. In the current case, South Dakota v. Wayfair, the state, along with several others, argues those rules are outdated.

But critics say changing the rules would have broader ramifications, with retailers being forced to comply with thousands of state and local tax authorities at what could be a significant cost.

And Armo questions who ultimately will reap the rewards.

“It’s to benefit the state," she said. "It’s not to benefit the consumer.”

For the full interview, click here.