>> A high stakes showdown at the US Supreme Court pits online retailers against brick-and-mortar shops. And a state government against previous Supreme Court precedent. South Dakota is suing three companies. Home goods supplier Wayfair.com, retailer Overstock.com, and tech store Newegg.com. A 1992 Supreme Court precedent determines states cannot collect sales tax on purchases unless the firms have a quote, physical presence in the state.
South Dakota wants the nine justices to change that rule and it has the backing of President Donald Trump's administration. And it comes amid Trump's harsh criticism of Amazon.com, the dominant player in online sales.>> It's not fair to the United States, it's not fair to our taxpayers. And Amazon has the money to pay the fair rate at the post office which would be much more than they're paying right now.
>> Trump has attacked Amazon CEO Jeff Bezos who also owns The Washington Post, a newspaper the President often derides as fake news. Amazon is not a party to the Supreme Court case. It collects sales taxes from direct purchases on its site, but not for items sold by third-party vendors, which account for about half of total sales.
A ruling in South Dakota's favor would help physical stores compete with online rivals.>> We have retailers all over the United States who are going out of business. You look at some of these small towns where they had a beautiful main street, with stores, the stores are all gone.
>> Major retailers, including the National Retail Federation, have come out in support of South Dakota. Its members include Walmart, Target and Amazon.com. E-Commerce companies supporting the defendants include eBay and Etsy. Oral arguments in South Dakota v Wayfair begin Tuesday.