The National Retail Federation (NRF) said a ruling issued by the South Dakota Supreme Court sets the stage for the U.S. Supreme Court to revisit a long-out-of-date ruling on ecommerce. But NRF called on Congress to quickly pass legislation allowing states to require online sellers to collect sales tax the same as local stores rather than continuing to leave the issue in the hands of the courts.

“It’s time for Congress to pass a law that recognizes the evolution in the retail industry over the past two-and-half decades and say that online sellers should no longer be given an unfair advantage over Main Street merchants,” said David French, NRF senior vice president for government relations. “The state of South Dakota is not going to stand for this loss. They are going to push their case, and that means it is very likely that there will be a new ruling on this issue by the U.S. Supreme Court. We are more than happy to see the Supreme Court revisit this issue, but we view a carefully crafted stakeholder-led decision in Congress as far preferable to a judicial decision that reverses the previous ruling without addressing the details of implementation.”

The South Dakota Supreme Court ruled against a 2016 state law requiring online merchants with more than $100,000 in sales or 200 transactions with state residents to collect sales tax. The court said the state cannot require out-of-state sellers to collect sales tax. The ruling is in line with the U.S. Supreme Court’s 1992 Quill decision, which held that online sellers can only be required to collect sales tax in states where they have a physical presence such as a store, office, or warehouse.

French called on Congress to pass the Remote Transactions Parity Act, a bill pending in the House that would allow states to require out-of-state sellers to collect sales tax regardless of whether they have a presence in the customer’s state. The legislation also provides protection for small businesses from any potential compliance burden.

For more information, visit nrf.com.