Quill

The Supreme Court has agreed to decide whether states may require out-of-state retailers to collect sales tax.

In Quill Corp. v. North Dakota (1992), the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales tax. South Dakota asks the Supreme Court to overturn Quill in South Dakota v. Wayfair

The State and Local Legal Center (SLLC) has filed an amicus brief asking the Supreme Court to agree to hear South Dakota’s petition in South Dakota v. Wayfair. In this case South Dakota is asking the Supreme Court to hold that states may require out-of-state retailers to collect sales tax.

In Quill Corp. v. North Dakota (1992), the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales tax.

South Dakota has filed a petition in South Dakota v. Wayfair asking the U.S. Supreme Court to hear a challenge to its law requiring out-of-state retailers to collect sales tax.

In Quill Corp. v. North Dakota (1992), the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales tax.

In March 2015 Justice Kennedy wrote a concurring opinion stating that the “legal system should find an appropriate case for this Court to reexamine Quill.” Justice Kennedy criticized Quill in Direct Marketing Association v. Brohl for many of the same reasons the State and Local Legal Center stated in its amicus brief. Specifically, internet sales have risen astronomically since 1992 and states and local governments are unable to collect most taxes due on sales from out-of-state vendors.

Following its predictable loss before the South Dakota Supreme Court, South Dakota is expected to ask the U.S. Supreme Court to rule that its law requiring out-of-state retailers to collect sales tax is constitutional. Doing so will require the U.S. Supreme Court to take the unusual step of overruling precedent.  

In Quill Corp. v. North Dakota, decided in 1992, the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales tax.

CSG Midwest
A quarter-century has passed since a U.S. Supreme Court decision limited the ability of states to collect taxes from the remote sales of out-of-state retailers. Legislators wanting to secure that taxing authority — which they say is critical to maintaining state revenue bases and helping brick-and-mortar businesses — believe a reversal of Quill Corp. v. North Dakota may finally be on the horizon.
“I do believe Quill will get overturned; it’s just a matter of time,” North Dakota Sen. Dwight Cook says. And one of the U.S. states most reliant on the sales tax as a revenue source, South Dakota, might bring the case that “kills Quill.”
A year ago, South Dakota lawmakers passed a bill requiring most retailers without a physical presence in the state to remit the state’s sales tax. SB 106 applies to sellers with 200 or more annual transactions in South Dakota or whose gross revenue from sales in the state exceed $100,000. This year, Indiana (HB 1129) and North Dakota (SB 2298) passed “economic nexus” laws of their own.

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