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George Isaacson (left), lead counsel for the defendants in the South Dakota vs. Wayfair case, outside the Supreme Court. Photo: Alex Wong/Getty Images.

Supreme Court justices seem split on whether to allow state governments to collect sales tax from online retailers, a move that would drastically change long-standing interstate e-commerce rules.

Why it matters: It's one more example of the Supreme Court grappling with the collision of existing legal precedent and the realities of the tech-driven economy.

Driving the news: In the case before the high court Tuesday, South Dakota sought to overturn established rules that only allow states to require retailers to collect sales taxes if they have a physical presence there. Online retailers Wayfair and Overstock say changing the rules would force online retailers to deal with a confusing patchwork of state tax laws.

Most large online retailers already pay sales tax, but many of the smaller vendors using their platforms often don't. Small- and medium-sized online retailers may struggle with the logistics of collecting and remitting sales tax in the 45 states that have one.

A state-by-state sales tax system could force small sellers to rely on large online retail platforms like Amazon, Etsy and eBay who have the infrastructure to deal with the complexity, said Steve DelBianco, President and CEO of NetChoice, an e-commerce trade association.

  • Those online marketplaces may also feel the biggest effect: The Government Accountability Office estimates that between $3.9 billion and $6.2 billion in taxes could have been collected on goods sold by smaller vendors in 2017, the WSJ pointed out.

In Congress: Online retailers say it's up to Congress to address the issue — even though Congress has failed to act. Rep. Bob Goodlatte has pushed legislation to streamline online sales tax, but those negotiations stalled.

What's next: A decision is expected by the end of June.

Go deeper: USA Today has a good overview of Tuesday's arguments.

Go deeper

Updated 18 mins ago - World

Netanyahu is out as new Israeli government survives confidence vote

Photo: Gil Cohen-Magen/AFP via Getty Images

Israel has a new prime minister for the first time since 2009 after a power-sharing government led by Naftali Bennett survived a confidence vote on Sunday. Bennett was sworn in as prime minister.

Why it matters: Benjamin Netanyahu, Israel's longest-serving prime minister and the man around whom Israeli politics have revolved for a decade, will now become opposition leader. Bennett, a right-wing former Netanyahu protege, will lead the most ideologically diverse government in Israeli history.

Updated 37 mins ago - Politics & Policy

Afghanistan, cyber defense on the agenda for Biden in Brussels

Joe Biden arrives at Melsbroek Military Airport in Brussels on June 13. Photo: Yves Herman/POOL/AFP via Getty Images

President Biden touched down in Brussels on Sunday evening ahead of two days of talks with NATO and European Union leaders as part of his first foreign trip as president.

Driving the news: Biden was greeted on the tarmac by Belgian Prime Minister Alexander De Croo and a slate of other officials, including Douglas Jones and Mark Libby, the U.S. Permanent Representatives to NATO and the EU respectively.

Maersk CEO: Global businesses should be wary of politics

Photo: "Axios on HBO"

The CEO of the world's largest container-shipping company cautions that international firms have to be careful of taking political stances.

  • What they're saying: "We cannot run a global business if we start to have views on politics in every single country that we are in," Maersk CEO Søren Skou tells "Axios on HBO."

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