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Can states require online sales tax? Billions at stake in case at Supreme Court

On this Tax Day, while many Americans rush to file their income tax returns, the Supreme Court heard arguments in a case on state sales taxes and online shopping. Marcia Coyle of the National Law Journal joins Judy Woodruff to discuss what happened in the courtroom today, as well as a ruling that will make it harder for the Trump administration to deport some immigrants.

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  • Judy Woodruff:

    Today, of course, is a big day on the tax calendar.

    While some Americans rush to file their income tax returns, the Supreme Court heard arguments in a case on state sales taxes and online shopping. The justices also handed down a ruling that will make it harder for the Trump administration to deport some immigrants.

    Marcia Coyle of "The National Law Journal" was in the court, and she joins me now.

    Hello, Marcia.

  • Marcia Coyle:

    Hi, Judy.

  • Judy Woodruff:

    Let's thank you.

    So, let's talk first about the immigration ruling. Tell us what the law says and what the justices say.

  • Marcia Coyle:

    All right.

    If you're an illegal alien and you commit what's called an aggravated felony, you're going to be deported, but that aggravated felony definition includes crime of violence. And that's what the court was looking at in the case today, the definition of crime of violence, which basically says a felony in which there is a substantial risk that physical force would be used to commit the crime.

    This alien, who actually was a legal permanent resident of the United States, had committed two burglaries with no violence involved. The court today said in a 5-4 decision by Justice Kagan that the definition of crime of violence was unconstitutionally void for vagueness — vagueness — sorry.

    It was arbitrary. It was confusing. Judges went in different directions on the same sort of crime.

  • Judy Woodruff:

    And it was interesting, in that a conservative justice, Justice Gorsuch, voted with the more liberal justices.

  • Marcia Coyle:

    That's right. Actually, this is the second time the court heard the case. They heard it in 2016.

    After Justice Scalia died, they apparently deadlocked. Justice Gorsuch made the difference this time, and he did the join the more liberal wing of the court and took an originalist approach to finding whether this law was vague and unconstitutionally vague.

  • Judy Woodruff:

    And also interesting to point out the Trump administration not happy with this ruling. They put out different statements. The Department of Homeland Security saying this is going to make it harder for us to keep the nation safe.

  • Marcia Coyle:

    There is a category of crimes that seem to fall into this crime of violence definition that was confusing and vague, and so those are the ones that will be affected.

    But the administration still will be able to deport aliens who commit very violent crimes, as aggravated felonies. But, yes, the Department of Justice and Homeland Security have asked Congress to step in now.

  • Judy Woodruff:

    Right, urging them to close some loopholes.

    Now, separately, the justices heard this case having to do with whether states should be able to charge a sales tax for purchases made online. Tell us about that.

  • Marcia Coyle:

    Right.

    South Dakota brought the case to the Supreme Court. They want the court to basically overturn a 1992 decision that said states can't require out-of-state retailers and other sellers of goods and services to collect sales tax unless those out-of-state sellers have a physical presence in the state that wants to have them collect the tax, a building, employees.

    South Dakota claims that that physical presence test, times have changed, it's out of date. The growth of e-commerce now has made it — put their own in-state sellers at a disadvantage, and they basically are losing billions of dollars in potential revenue that they need.

    Wayfair is on the other side of the case, along with Overstock.com and Newegg. And they claim that, no, what's going to happen here if you eliminate that test, you're going to subject out-of-state retailers to more than 12,000 individual taxing jurisdictions. And they are going to have huge costs in time and money in trying to figure out each of those jurisdictions' taxation system.

  • Judy Woodruff:

    Any suggestions from the questions the justices asked about what they're thinking?

  • Marcia Coyle:

    Right.

    Judy, I took away two main things. One, the justices are very concerned about the fallout if they do eliminate the physical presence test. Justice Sotomayor, for example, said, what about retroactive tax liability? How do we decide how much contact with the state is enough?

    Also, there were a number of justices who said, because of all the problems that could happen, maybe this is really up for Congress. Congress can make the compromises that we as justices cannot do. They can balance the interests on both sides.

  • Judy Woodruff:

    It will be interesting to see what they rule.

    You mentioned, I should say, Justice Sotomayor. She took a fall at her house yesterday, I gather, broke her shoulder.

  • Marcia Coyle:

    Yes. She broke her left shoulder. And there was no evidence it in the courtroom under her robe, but apparently her arm is in a sling, and keeping her schedule.

  • Judy Woodruff:

    Soldiering on, showing up for work.

  • Marcia Coyle:

    Absolutely.

  • Judy Woodruff:

    Marcia Coyle, thank you for showing up here.

  • Marcia Coyle:

    My pleasure, Judy.

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