Tennessee Governor Bill Haslam says the state has been sued for moving to require all major online vendors to collect sales taxes on purchases made in the state.
Under current federal law, states are only allowed to require sales taxes to be collected by companies that also have a physical presence within the state. A new Haslam tax rule extends that requirement to all retailers with sales of more than $500,000 per year in Tennessee, regardless of where they are located.
Haslam says the state was sued late last week after sending out notices to companies that the taxes must be collected on Tennessee's behalf.
Haslam has long acknowledged that the move would likely result in litigation and says he hopes the U.S. Supreme Court will settle the matter.