Capitol to Capitol | April 16, 2018

S.D. v. Wayfair: The Tax Case of the Millennium

Since 1992, Quill v. North Dakotathe U.S. Supreme Court decision that prohibits a state from requiring out-of-state sellers to collect and remit the state’s sales tax, has been the law of the land. In a few months, that may no longer be the case.

DYK?

Until last Monday, no U.S. senator had ever given birth while in office. That changed on April 9 when Senator Tammy Duckworth (D-Ill.) gave birth to her second child, a baby girl.

It’s familiar territory for Illinois’ junior senator. In 2013, while serving in the House, Duckworth became the 10th woman to give birth while serving in Congress.   

Tomorrow, the court will hear oral arguments in South Dakota v. Wayfair, which should shed some light on how the justices may ultimately decide the case when the court issues an opinion in June. Regardless of how the court rules, the outcome will have a profound impact on state taxing authority and interstate commerce. And given that the millennium is less than two decades old, it’s fair to say that this could be its most significant tax case to date. POLITICO even went as far to say that, “Apparently, this isn’t just a case for tax dorks, either. The court has announced that seating for arguments will be limited, which happens only occasionally.” That is fitting because this court case will consider how the internet has changed the way that consumers shop, just as it has changed nearly every aspect of our lives in the past quarter-century.  

Decision Expected in June

The Supreme Court is expected to issue its opinion in South Dakota v. Wayfair in June. Should South Dakota win, states will continue to work together to ensure that interstate sales tax collection is not burdensome or costly for remote sellers. Should South Dakota lose, states will have to rethink the long-term viability of the sales tax.

Resources

NCSL ContactsMax BehlkeJake Lestock

Paul Ryan Announces Retirement

Last Wednesday, House Speaker Paul Ryan (R-Wis.) surprised Congress with news that he would not seek re-election in November. The speaker, however, was clear that he is not resigning. He said, “I intend to fully serve my term as I was elected to do, but I will be retiring in January, leaving this majority in good hands with what I believe is a very bright future.”

Ryan’s reason for not running—his family. He said that “If I am here for one more term, my kids will only have known me as a weekend dad. I cannot just let that happen.”

The surprise announcement has caused a stir in the Capitol. Democrats see it as the latest sign of a “blue wave” in November, as 28 Republicans have announced that they will retire and not run for another office, the most retirements for either party since 1996.

Across the aisle, Republicans almost immediately began discussions of Ryan’s replacement and whether the lame-duck speaker should remain in his post for the remainder of this Congress. Many Republicans, including allies of Majority Leader Kevin McCarthy (R-Calif.), Ryan’s pick to replace him, believe that Ryan should step down sooner to avoid an internal party battle during an election year. Moreover, some Republicans question whether Ryan can be an effective leader given that he is on his way out the door.  

Watch Ryan’s interview with “Meet the Press” host Chuck Todd.

Trump Reconsidering Pacific Trade Pact

Three days after taking the oath of office, President Donald Trump announced that the U.S. would withdraw from the Trans-Pacific Partnership (TPP), a move he explained would protect American jobs. Last week, he said that he would reconsider joining the agreement if it were “substantially better” than the terms offered to former President Barack Obama, but that outcome seems unlikely.

DYK?

President John F. Kennedy ordered more than 1,000 Cuban cigars for personal use just hours before he made them illegal. Kennedy asked his press secretary and fellow cigar smoker Pierre Salinger to obtain “1,000 Petit Upmanns” on Feb. 6, 1962, so he could have them in his hands before they were deemed contraband. The next morning, as soon as he learned that 1,200 Cuban cigars had been bought for him, he signed the decree to ban all of the communist state's products from the U.S.

After the U.S. withdrew from the TPP, the remaining 11 countries renegotiated parts of the agreement, which included removing some U.S. demands. The new deal, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), was signed in March and will become effective when it is ratified by six of the member nations. Therefore, renegotiating the terms of the agreement will be quite difficult for the U.S. However, the 11 countries that signed the CPTPP suspended, rather than removed, about 20 provisions of the original TPP that were sought by Washington, including provisions that strengthened protections for intellectual property. Reinstating these provisions would likely not be difficult, but “improving” them or renegotiating other terms of the agreement would be another matter entirely. 

NCSL Contacts: Jon JukuriMiranda McDonald

2017 National Assessment of Educational Progress (NAEP) Scores Released 

Last week, the National Assessment of Educational Progress (NAEP) released 2017 math and reading results for grades 4-8. “The Nation’s Report Card” was last administered in 2015. Overall, the 2017 results held consistent with 2015 results, with continued achievement gaps across race and income remaining prevalent in the U.S. Results included improved eighth-grade reading skills for high-performers, while low-performing fourth-graders saw declines in both math and reading results. There was no significant test score improvement for most states in both subjects and both grades.

Since the test was first administered in the 1990s, many technological advancements have been made. Instead of using paper and pencil, 80 percent of students used digital tablets on this year’s test. However, critics of digital tests, including Louisiana Superintendent John White, argued that disadvantaged students without previous exposure to digital tests often perform worse. White has also challenged test administrators to release data that compares the test performance of students that used pencil and paper with that of those who used digital tablets. See complete NAEP results, including state-by-state data.

NCSL Contacts: Joan WodiskaMiranda McDonald

NCSL Attends Reagan Institute Summit on Education (RISE)

The Ronald Reagan Presidential Foundation and Institute hosted an inaugural bipartisan convening of education luminaries on the 35th anniversary of the landmark report, “A Nation at Risk.” The report, released by President Ronald Reagan’s National Commission on Education in 1983, called for the complete overhaul of America’s public schools’ standards. The Reagan Institute Summit on Education (RISE) explored America’s progress and challenges since the issuance of the report.

The summit kicked off with an engaging conversation between Condoleezza Rice and Janet Napolitano, president of the University of California system, on the importance of lifelong learning, state accountability, public-private partnerships, school safety and recent NAEP scores. All those issues were hallmark topics throughout the summit. U.S. Secretary of Education Betsy DeVos and Bill Bennett, secretary of education during the Reagan administration, met to discuss NAEP reports, student engagement and continued paths forward from “A Nation at Risk.”  

NCSL was represented by Massachusetts Representative Alice Peisch (D), co-chair of NCSL’s Education Committee, who contributed as a panelist on States Leading the Way, a conversation on state ESSA plans between state education chiefs including Louisiana’s John White and Mississippi’s Carey Wright. Jill Biden, college educator and former second lady of the United States, delivered closing remarks before introducing the last panel. The summit culminated with a reflective and predictive conversation between former U.S. Secretaries of Education Rod Paige, Margaret Spellings, Arne Duncan and John B. King, Jr.  

NCSL Contacts: Joan WodiskaMiranda McDonald

President Signs Two Executive Orders

Last week, the president signed two executive orders (EO). On Tuesday, the president called for federal agencies to create or strengthen existing work requirements for low-income Americans who benefit from federal welfare programs including Medicaid, food stamps and public housing benefits. The EO calls on the heads of the federal agencies to review public assistance programs related to current work requirements and report back with recommendations in 90 days. The White House released a statement that, in part, said:

DYK?

Every year since 1955, taxes have been due on April 15 ... with exceptions. Like the last two years. And this year, when taxes are due on April 17.

Why? This year, April 15 fell on a Sunday, and Emancipation Day fell on a Monday. Emancipation Day is a holiday unique to Washington, D.C., that is celebrated on April 16, the date in 1862 when President Abraham Lincoln freed the slaves in the District. Since Emancipation Day is a legal holiday in D.C., which means the IRS offices are closed, it has the same effect on taxes as a national legal holiday.

“The Federal Government should do everything within its authority to empower individuals by providing opportunities for work, including by investing in Federal programs that are effective at moving people into the workforce and out of poverty. It must examine Federal policies and programs to ensure that they are consistent with principles that are central to the American spirit — work, free enterprise, and safeguarding human and economic resources. For those policies or programs that are not succeeding in those respects, it is our duty to either improve or eliminate them.”

On Thursday, the president also signed an EO establishing a task force to audit business practices at the United States Postal Service (USPS). This comes after a number of tweets from Trump criticizing Amazon for taking “unfair advantages” of the Postal Service. The mandate released by the White House states, “The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout."

NCSL Contacts: Abbie Gruwell (Human Services), Haley Nicholson (Health), Jon Jukuri (Housing), Ethan Wilson (Interstate Commerce)

House Agriculture Committee Set for Farm Bill Markup on Wednesday

The House Agriculture Committee is set to begin a markup of its 2018 Farm Bill this Wednesday. The bill’s text can be found here and a section by section summary can be found here. Stay tuned to NCSL for any alerts as the amendment deadline is later this evening.

NCSL Contacts: Ben Husch, Kristen Hildreth

Also of Note …

  • ‘Spare me’: Tillis draws GOP fire with pro-Mueller push POLITICO
    The Republican senator is eager to shield the special counsel from Trump — regardless of potential blowback from conservatives or the president. “The same people who would criticize me for filing this bill would be absolutely angry if I wasn’t pounding the table for this bill if we were dealing with Hillary Clinton,” he argued. “So spare me your righteous indignation.”
  • GAO: EPA violated law with Pruitt's soundproof boothThe Hill
  • Poll: Democrats’ advantage in midterm election support is shrinkingWashington Post
  • Democrats hold an advantage ahead of the midterm elections, but a Washington Post-ABC News poll shows that edge has narrowed since January, a signal to party leaders and strategists that they could be premature in anticipating a huge wave of victories in November.
  • California billionaire Steyer's candidate guide pushes impeachment as good politics for midtermsFox News
    Billionaire liberal activist Tom Steyer’s “Need to Impeach” campaign sent out guides to more than 5,100 Democratic candidates across the country just two weeks before the first of a dozen Democratic primary debates his group, NextGen America, is bankrolling.

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NCSL's Advocacy in Washington

NCSL's Washington staff advocate Congress, the White House, and federal agencies on behalf of state legislatures in accord with the policy directives and resolutions that are recommended by the NCSL Standing Committees and adopted by the full conference at the annual NCSL Legislative Summit Business Meeting. As a result of the advocacy that is guided by these policies positions, NCSL is recognized as a formidable lobbying force in state-federal relations.

NCSL Staff in Washington, D.C.

  • Neal Osten | 202-624-8660 | Molly Ramsdell | 202-624-3584 | Directors
  • Max Behlke | 202-624-3586 | Budgets and Revenue
  • Danielle Dean | 202-624-8698 | Communications, Financial Services
  • Susan Frederick | 202-624-3566 | Law, Criminal Justice, and Public Safety
  • Abbie Gruwell | 202-624-3569 | Human Services
  • Ben Husch | 202-624-7779 | Natural Resources and Infrastructure 
  • Jon Jukuri  | 202-624-8663 | Labor, Economic Development and International Trade
  • Haley Nicholson | 202-624-8662 | Health
  • Ethan Wilson | 202-624-8686 | Commerce and Financial Services
  • Joan Wodiska | 202-624-3558 | Education