Dive Brief:

• South Dakota Attorney General Marty Jackley (R) announced Monday he has filed a petition asking the United States Supreme Court to review the South Dakota Supreme Court decision regarding a hotly debated online sales tax case, State of South Dakota v. Wayfair, Overstock and Newegg, according to a press release issued by his office.

• Jackley is calling on SCOTUS to "level the playing field" by overruling the physical-presence requirement set as a precedent 25 years ago in the Quill Corp v. North Dakota case.

• The case stems from a 2016 North Dakota state law requiring out-of-state merchants with annual in-state sales totaling more than $100,000 or 200 separate transactions to collect and remit sales tax, which was struck down by the state Supreme Court due to precedent.

Dive Insight:

Twenty five years ago, SCOTUS ruled that states could not require out-of-state retailers to collect sales tax unless they had a physical presence in the state. But back in 1992, the dot-com boom had yet to hit, and merchants and consumers had not foreseen the impact that e-commerce would come to have on the industry. Today, with pure-play online merchants like Stitchfix and e-commerce marketplaces from the likes of Amazon dominating retail segments, Jackley said it’s time to modernize online sales tax rules — and he’s not alone.

For nearly a decade, retailers and trade organizations including the National Retail Federation and the Retail Industry Leaders Association, have lobbied Congress to pass legislation to end competitive advantages that the ruling inadvertently extended to e-commerce players, according to a press release from RILA.

"The artificial price advantage for online retailers that the United States Supreme Court unknowingly created in Quill has done significant damage to thousands of brick and mortar retailers, and meant billions in lost revenue for state and local governments in the intervening quarter of a century," Deborah White, retail litigation center president and general counsel at RILA, said in a press release. "Although the Quill Court correctly noted that Congress could use its Commerce Clause power here, Congress has not done so and the increasing partisan divide makes that possibility ever more remote."

In recent weeks, the NRF has urged Congress to pass legislation that would allow states to require retailers to collect online sales tax, taking the issue out of the courts. "The state of South Dakota is not going to stand for this loss," David French, NRF senior vice president for government relations, said in a press release earlier this month. "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."

For years, one of the biggest adversaries in the online sales fight was Amazon. But the e-commerce giant has been collecting sales tax for years now in most states, and as of April 1 of this year it began collecting in all remaining states with such levies. It is unclear when SCOTUS will take up the issue.