On Friday, the U.S. Supreme Court announced that this year it will hear two cases that will be closely watched by Washington’s Legislature.

First, the Court will hear South Dakota v. Wayfair, Inc. This is about whether states can require out-of-state retailers to collect sales taxes. In 1992, the Court held that states can only require businesses to collect sales and use taxes if they have a physical presence in a state. Since then, there have been many attempts to get Congress or the Court to act to allow states to require the collection of sales taxes on remote sales. (We wrote about the issue in this policy brief.)

Last year, the Legislature enacted EHB 2163, which made several tax changes. One of them requires remote sellers, referrers, and marketplace facilitators to either collect and remit sales taxes or comply with reporting requirements. The Department of Revenue estimates this will increase state general fund revenues by $340.5 million in 2017–19 and $695.5 million in 2019–21. As we noted in our report on the 2017–19 operating budget, these revenues aren’t a sure thing given the current Supreme Court precedent. That could change now that the Court is taking up the South Dakota case. According to the Wall Street Journal, if the Court hears the case in April, a decision could be handed down in June.

Second, the Court will hear Washington v. United States. This is the culvert case, and it has been ongoing since 2001. In 2013, the U.S. District Court required the state to fix fish passage barriers by 2030, and the Ninth Circuit affirmed this in 2016. Washington’s attorney general said,

. . . important issues are at stake in this appeal, as explained by the many dissenting Ninth Circuit judges. For example, the Ninth Circuit’s decision forces the state to expend significant resources on fixing culverts that will not benefit salmon. That makes no sense. The decision also requires Washington taxpayers to shoulder the entire financial burden for problems largely created by the federal government when it specified the design for the state’s old highway culverts. That’s not fair.

The state has already begun making fixes. In all, the Washington Department of Transportation estimates that complying will cost $2.4 billion.