SACRAMENTO, Calif. (Legal Newsline) — California Attorney General Xavier Becerra announced Nov. 3 he has joined a bipartisan coalition of 36 attorneys general urging the U.S. Supreme Court to reconsider the “physical presence” rule.

The rule, which the coalition says is outdated, allows retailers to avoid certain state taxes imposed in states in which they sell products or services to consumers but in which they do not have a physical presence.

“Our small businesses and local retailers are the backbone of our economy,” Becerra said. “But, right now, out-of-state and online retailers can do business in California without collecting state taxes. This puts our local businesses at a disadvantage. Given our changing economy, we urge the U.S. Supreme Court to reconsider this issue.”

“The court’s earlier view of sales and use tax nexus no longer makes sense in today’s economy,” said Nicolas Maduros, director of the California Department of Tax and Revenue Administration. “It’s unfair to both in-state retailers and to all California taxpayers.”

Joining Becerra in the brief were the attorneys general of Colorado, Alabama, Arkansas, Connecticut, Florida, Hawaii, Illinois, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Utah, Washington state, Wisconsin, Wyoming, and the District of Columbia.

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