On June 21, 2018, the U.S. Supreme Court issued its decision in South Dakota v. Wayfair, Inc., et al, the highly anticipated challenge to the sales tax physical presence standard adopted through Quill v. North Dakota in 1992. Accordingly, the Court has overruled the Quill physical presence standard allowing states to impose economic sales tax nexus standards on remote sellers.

Writing for the majority, Justice Kennedy, who also sat on the Quill court in 1992, noted that the Quill physical presence rule was no longer appropriate for, nor could it have anticipated, the modern e-commerce economy. Finally, it was noted that most of the states had requested the Court overturn Quill, stating that it was “essential to public confidence in the tax system” that the Court avoid creating an unfair burden shift in tax collection to in-state retailers.Continue reading