June 22, 2018 

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Constitutionality of Davis' Tax Bill Confirmed by Justices Kennedy, Thomas, Ginsburg, Alito, and Gorsuch!

If you follow my legislation each year, you're probably aware of my focus on tax reform.  I know why Virginia has been declared as having the 30th worst tax policies in the nation, I understand how those policies are hurting Virginia's ability to attract high paying jobs, and I'm not shy about challenging the status quo and any decades-old thought holding our economy back.

In 2017, I submitted HB 1501, The Virginia Streamlined Sales and Use Tax Act, which would have allowed Virginia to join 24 other states which collect sales tax on the sale of goods to their residents by out-of-state companies.  It would have leveled the playing field between Virginia "brick and mortar" businesses and out-of-state internet businesses and brought in tens of millions of dollars annually that could have been used to lower the tax burden on Virginians or add additional funding for education and infrastructure.

Instead, I faced opposition who declared that my bill was unconstitutional. They cited a 25 year old Supreme Court case, Quill Corporation v. North Dakota which ruled that a retailer had to have a physical presence in a state for it to be required to collect and submit sales tax.  This case was decided when f ewer than 2 percent of Americans had internet access and no one could have envisioned a world where the world's largest retailers would be online businesses.

I agreed with many of our nation's top legal minds that Quill at a minimum was an outdated decision and at worst a bad decision on its face. However, my legislation in 2017 failed to even make it out of subcommittee.  

Yesterday, on a 5-4 decision in South Dakota v. Wayfair Inc., the Supreme Court effectively overturned the Quill decision. Justice Thomas who voted for the Quill decision in 1992 opined that he was wrong in Quill and should have joined the dissenting opinion in that case.  Additionally, while Justice Roberts fell short of voting to overturn the Quill precedent, in his dissent he stated  that the court's ruling in Quill had been "wrongly decided."

What does this mean for Virginia? It means that during the 2019 session, I will once again be submitting legislation to capitalize on tens of millions of dollars of untapped revenue, and Virginia may finally start the process of reforming its tax code that was truly designed for a pre-internet society.
Warmest regards,
Glenn Davis Signiture
Glenn R. Davis
Paid for and Authorized by Glenn Davis for Delegate