Legal Docket: High court ponders how to best tax online shopping

Tax season online. A case heard by the Supreme Court last week could affect anyone buying Christmas gifts over the internet. Colorado requires consumers who buy online or by mail-order from businesses outside the state to pay a 2.9 percent use tax. Consumers are supposed to report and pay that tax. To increase collections, Colorado passed a law requiring out-of-state companies to report any sales to Colorado residents to the state Department of Revenue. If business owners don’t comply, they are penalized. Business groups opposed the law, saying it violated the Constitution by discriminating against interstate commerce.

During oral arguments, Justice Samuel Alito worried other states will follow Colorado’s lead: “Let’s say I start up a small business and I’m selling a few thousand dollars worth of goods via the internet to people from all over the country. Now I will have to submit potentially 50 different forms to all of these states reporting that somebody in South Carolina purchased something from me that costs $23.99.” Colorado Solicitor General Daniel Domenico agreed that would logically follow, but he argued it was still a good scheme to get revenue for state and local governments. But Justice Antonin Scalia doubted Colorado’s law was problem-free. “I cannot imagine that the other states have not piled on with this thing if it is so essential to the tax system and if there are no problems with doing it,” he said.

Unfair advantage? Congress passed a law in 2008 giving the Federal Railroad Administration and Amtrak power to decide priority in using railroad tracks, partly to keep passenger trains running on time. That decision didn’t go over well with freight lines because it delayed cargo deliveries on tracks they own almost exclusively, outside the northeastern U.S. The federal government can investigate the freight lines if Amtrak isn’t performing up to standards.

Amtrak was founded and funded by the government, but runs like a private corporation. Oral arguments on this case featured much discussion about whether Amtrak is public or private. “No matter what we call Amtrak, the question ultimately at the end of the day is whether this federally chartered corporation with all of the various financial incentives, statutory mandates and commands, can exercise regulatory power over other commercial actors in the marketplace,” said Thomas Dupree, the lawyer for the freight railroads. Justice Elena Kagan said government oversight should help curtail unfair practices by Amtrak. But when private business is forced to change its operations to suit Amtrak, which is essentially legislating favorable conditions for itself, is it constitutional? A lower court said it was not. The Supreme Court’s decision in the matter will be released by June.

Stuck in traffic. In a unanimous ruling last week, the court ruled contract employees with Amazon are not entitled to pay for time spent in security screenings after work. The reasoning? Unless an activity is “integral and indispensable” to the core job, no pay. In this case, the job was shelving, retrieving, and packaging Amazon.com orders. Going through security screenings does not fit that core job description. Just last year, the court ruled U.S. Steel Corp workers weren’t entitled to pay for time spent putting on protective gear. But the issue of worker pay isn’t going away. Critics say if employees are required to stay on the employer’s premises for something that only benefits the employer, workers ought to be compensated for that time.

Day in court. Bobby Chen earned the rarest of the rare in the legal world: He got the Supreme Court to take his case even though he has no lawyer, hand-wrote parts of his petition with lots of grammatical errors, and didn’t even pay the $300 filing fee. There’s one problem with this storybook case: No one knows where the main character is. With Chen’s next filing due Dec. 22, his case might be dismissed if he doesn’t show up. The legal issue concerns time limits on serving a summons. Chen’s house was demolished by the City of Baltimore and he seeks recompense for that. So if you happen to know Bobby Chen, you might want to let him know he needs to get in touch with someone at the Supreme Court. Lawyers are lining up to represent him for free, for a chance to argue a case in front of the nation’s highest court.