On June 21, 2018, in South Dakota v. Wayfair, Inc., et al., the U.S. Supreme Court ruled that states may collect sales tax from internet retailers. 

The majority decision overruled Quill Corp. v. North Dakota, a 1992 decision, which had barred states from collecting sales taxes from retailers without a brick-and-mortar presence in the state.  Justice Anthony M. Kennedy wrote the majority decision and noted that in 1992 “the court could not have envisioned a world in which the world’s largest retailer would be a remote seller”.  Kennedy also stated that “Quill has come to serve as a judicially created tax shelter for businesses that decide to limit their physical presence.”

In dissent, Chief Justice John G. Roberts Jr. affirmed that Quill was wrongly decided but opposed discarding the physical presence rule because the decision to potentially disrupt such a critical segment of the economy should be left to Congress. 

The decision is available here.

Additionally commentary is available here.

Summary By: Robert Dewald


18 06 27

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