Supreme Court hearing could impact stores like Dallas-based Neiman Marcus

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DALLAS — Retail bankruptcies soared to an all time high in the first quarter of 2018, according to Moody’s Investor Services.

Big names like Toys R Us and Claire’s are the latest to meet their demise, but they won’t be the last. According to the S&P Global Ratings a whole bunch of retailers could be defaulting soon, places like Sears, J.Crew, and one that could hit Dallas hard: Neiman Marcus.

But, maybe there’s the slightest lifeboat for these troubled stores on the horizon. Today the Supreme Court will hear arguments in South Dakota vs. Wayfair Inc, a case that’s challenging the rule that states can’t impose sales tax on out of state retailers, which has been a huge boon to e-commerce, and hurt conventional stores..

“Who the heck is going to shop at the brick and mortar store if you can save 8 or 10% by buying online,” said Chad Ruback, a Dallas appellate attorney.

Back in 1992 the Supreme Court upheld the law that state’s couldn’t enforce sales taxes on out of state businesses who sell in their state, but experts aren’t sure how they’ll swing this time.

“The US Supreme Court is not very eager to change its prior decisions, but the Supreme Court has from time to time over its history made some changes,” Ruback said.

Of course, while brick and mortar stores are in favor of evening the playing field, if the court overturns the rule it could be a deathblow to small online stores who would have no way of keeping up with every state’s sales tax laws. One thing is for certain:

“This case is a game changer regardless of which way it goes,” Ruback said. “There will be winners and losers in this case. Stay tuned.”

Yep, that's all places like Neiman Marcus can do, stay tuned and hope they're not shuttering their original Dallas store soon.

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