March 29, 2018 / 7:30 PM / a year ago

Trump adviser ties Amazon criticism to U.S. Supreme Court case

WASHINGTON, March 29 (Reuters) - As President Donald Trump intensified his attacks on Inc, a White House adviser on Thursday pointed to a U.S. Supreme Court case in which the administration has intervened that could force more online retailers to collect state sales taxes.

In the case to be argued on April 17, South Dakota is asking the nine justices to overturn a 1992 Supreme Court ruling that only companies with a physical presence in a state are required to collect the state’s sales tax on purchases. The Justice Department filed a brief in support of South Dakota, which lost in lower courts.

Amazon is not involved in the case but the eventual ruling could have consequences for the online retailing behemoth and other e-commerce businesses. Amazon has already agreed to collect sales taxes in all 45 states that impose them on items it sells directly.

South Dakota’s legal fight is with smaller e-commerce companies Wayfair Inc, Inc and Newegg Inc.

Kevin Hassett, chairman of the White House Council of Economic Advisers, told Fox Business Network’s Stuart Varney that Trump favors a “level playing field between internet venders and mom-and-pop stores,” a statement that echoes some of the rhetoric in the upcoming case.

South Dakota argues that brick-and-mortar retailers suffer because they have to collect the taxes and therefore have a pricing disadvantage.

Hassett focused on the fact that Amazon does not collect the taxes on sales made by third-party vendors, which is estimated to be about half of its total sales.

“So for Amazon there really is a big advantage on the state sales tax because of current policy,” Hassett said.

“Now we expect that what’s going to happen this year is it’s going to become more and more of a news story as we go into the summer, because the Supreme Court is hearing a case that might really fundamentally change the interstate tax structure on the internet,” he added.

Trump has repeatedly attacked Amazon and its Chief Executive Jeff Bezos, who owns the Washington Post, which the Republican president also has disparaged.

Trump on Thursday accused Amazon of not paying enough taxes, exploiting the U.S. postal system and putting small retailers out of business, but did not present evidence to back up claims or suggest any specific actions.

Pennsylvania and Washington state have recently passed laws requiring Amazon to collect sales on items sold by third-party vendors.

A Supreme Court ruling favoring South Dakota could funnel up to $13 billion annually of new tax revenues into the coffers of affected U.S. states, according to a 2017 federal government report.

Such a ruling would pave the way for states to expand tax collection for online sales across the board. Hassett indicated that federal legislation would be needed after the Supreme Court rules but offered no details.

A ruling is due by the end of June.

Reporting by Lawrence Hurley; Editing by Will Dunham

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