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Trump administration bolsters state's effort to collect online sales taxes

The Trump administration on Monday backed an appeal by South Dakota in which the state is asking the U.S. Supreme Court to require online retailers to collect sales taxes even if they have no actual store in a given jurisdiction, according to Reuters.

A ruling in favor of the state could provide up to $13 billion in additional revenue to states and municipalities, the report noted. Sales taxes are charged in 45 of the 50 states.

The U.S. Justice Department filed a brief on Monday bolstering South Dakota's effort, which would overturn a 1992 ruling. The government argues that the physical presence requirement is not compatible with the way e-commerce businesses have developed.

The requirement "bears no logical relationship to current economic conditions, and imposes intolerable burdens on the states' ability to collect tax revenue they are lawfully owed," Solicitor General Noel Francisco reportedly said in the brief.

In September 2017, the South Dakota Supreme Court ruled in favor of retailers in the dispute, including Newegg Inc., Overstock.com Inc. and Wayfair Inc., citing the 1992 decision.

Traditional retailers contend that e-commerce businesses gain an unfair advantage if they are not required to collect state sales taxes.

The justices are scheduled to hear arguments in the case in April, with a decision expected by the end of June.