- Associated Press - Saturday, February 18, 2017

CLINTON, Miss. (AP) - Some tax experts and conservative groups are questioning a proposed Mississippi regulation that would require large sellers to collect taxes on internet sales

Revenue Commissioner Herb Frierson agreed Friday that the rule, not yet enacted by the department, would directly challenge decades of U.S. Supreme Court precedent barring states from requiring companies with no physical location in the state to collect taxes.

“The whole purpose of it is to get the issue back in court and see if the Supreme Court will look at it again,” Frierson told The Associated Press in a phone interview. “What we’re doing is probably unconstitutional, but we’ve got to do it to get another hearing.”

The rule, likely to be enacted next month, could spark an immediate court challenge.

“It’s more than a tax issue,” John Fletcher, a tax lawyer with Jones Walker, said at a Wednesday hearing at Revenue Department headquarters. “It goes to the inherent authority of any administrative agency to defy Supreme Court precedent.”

Mike Hurst, of conservative legal group Mississippi Justice Institute , said Frierson is “without authority” to enact his plan and said the results will be “clearly unconstitutional.”

“Frankly, I’m shocked and dismayed our elected officials and state agencies would move forward with proposed laws and regulations which openly defy current law, when they themselves swore an oath to uphold and defend our Constitution,” said Hurst, A Republican who lost a bid for attorney general in 2015.

Alabama has said more than 50 retailers voluntarily complied with its law, even though it’s being challenged. Frierson said he hoped Mississippi’s effort might get similar results. He also said enacting the rule means Mississippi’s lawyers could influence any case heard by the Supreme Court.

Taxing internet sales has been a subject of debate in Mississippi for years. The state already imposes a 7 percent use tax, which buyers are supposed to voluntarily pay. While businesses often pay tax for large purchases, officials said Wednesday that consumers paid only $250,000 last year. They said the state could be missing out on as much as $100 million or $150 million a year in revenue.

On Feb. 1, Amazon.com started collecting use taxes voluntarily in Mississippi, an amount Frierson said could be worth $15 million to $30 million a year. Hurst’s group sought records relating to the deal, and appealed the department’s denial Friday to the state Ethics Commission.

State representatives passed House Bill 480 to tax internet sales earlier this month by a vote of 76-41, proposing to earmark money for road and bridge work. But the Revenue Department says it already has authority to proceed, citing a 1988 state law. It says anyone who is “purposefully or systematically exploiting the consumer market” of Mississippi must collect taxes. It wasn’t enforced after a 1992 U.S. Supreme Court decision that said North Dakota couldn’t tax mail-order office supply retailer Quill. Now, the department says it will require any company with Mississippi sales above $250,000 to collect.

“We recognize that this is a challenge to Quill,” Revenue Department Chief Counsel Ashley May told Hurst, Fletcher and others at the Wednesday hearing.

___

Follow Jeff Amy at: https://twitter.com/jeffamy . Read his work at https://www.apnews.com/search/JeffAmy .


Copyright © 2018 The Washington Times, LLC.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide