ATR and Digital Liberty Fellow Demri Scott wrote an op-ed for The Hill detailing the dangers of the Wayfair v. South Dakota Supreme Court decision in light of the EU digital tax. Wayfair overturned a longstanding precedent from the Quill Corp. v North Dakota case which established that only companies with a brick and mortar or employee presence were required to collect and remit taxes in a particular jurisdiction.
In the op-ed, Scott notes that the Wayfair decision could encourage taxation without representation on Americans from European regulators:
“What’s the biggest danger of the Wayfair decision? It could encourage European regulators to tax Americans without representation through the EU Digital Tax.”
The Court’s decision was a huge loss for representative government, which opens the door to thousands of tax jurisdictions within the United States and internationally. Scott notes that:
“In 1776, Americans willingly parted ways with Europe because of taxation without representation, but today the U.S. is flirting with disaster by giving two thumbs up to EU tax collectors following the Wayfair decision. Retailers will be exposed to complex and costly collection obligations, intrusive audits, and potential court proceedings. There needs to be boundaries for taxation. A physical nexus, set under the precedent of Quill, provided those boundaries so cities, states and other countries could only tax those with representation.”
To read more of Scott’s op-ed, click on the direct link to The Hill.
Photo Credit: Theophilos Papadopoulos