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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 27 mins ago - Economy & Business

Hybrid work now dominates the knowledge economy

llustration: Eniola Odetunde/Axios

For the first time since the start of the pandemic, most knowledge workers are in hybrid work arrangements, partly remote and partly in-office, a new survey finds.

By the numbers: 58% said they now work this way, in a survey of around 10,000 knowledge workers from the U.S., Europe, Australia and Japan, conducted last November by Future Forum, a research group backed by Slack.

Rents hit all-time high

Data: Zumper; Chart: Axios Visuals

The national median price of a one-bedroom rental apartment in January was up 12% year-over-year, to $1,374 — an all-time high, per Zumper, an online apartment rental site.

Why it matters: Inflation is taking a bigger bite out of people's paychecks these days not only in food and gasoline, but also in housing costs.

A pandemic victim: Ethical supply chains

Illustration: Aïda Amer/Axios

Over the last decade, global companies have put in place elaborate policies to ensure their suppliers protect worker safety and human rights. They're struggling to comply with those policies in the pandemic.

Driving the news: COVID-era disruptions have caused a spike in noncompliance with health and safety rules, according to new data from Qima, which audits supply chains.

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