Sales Tax

In South Dakota v. Wayfair the Supreme Court ruled that states and local governments can require vendors with no physical presence in the state to collect sales tax. According to the Court, in a 5-4 decision, “economic and virtual contacts” are enough to create a “substantial nexus” with the state allowing the state to require collection.  

In 1967 in National Bellas Hess  v. Department of Revenue of Illinois, the Supreme Court held that per its Commerce Clause jurisprudence, states and local governments cannot require businesses to collect sales tax unless the business has a physical presence in the state.

Twenty-five years later in Quill v. North Dakota (1992), the Supreme Court reaffirmed the physical presence requirement but admitted that “contemporary Commerce Clause jurisprudence might not dictate the same result” as the Court had reached in Bellas Hess.

In South Dakota v. Wayfair South Dakota is asking the Supreme Court to overrule precedent and hold that states and local governments may require retailers with no in-state physical presence to collect sales tax. The National Conference of State Legislatures estimated that states lost $23.3 billion in 2012 from being prohibited from collecting sales tax from online and catalog purchases. 

In 1967 in National Bellas Hess  v. Department of Revenue of Illinois, the Supreme Court held that per its Commerce Clause jurisprudence, states and local governments cannot require businesses to collect sales tax unless the business has a physical presence in the state.

Twenty-five years later in Quill v. North Dakota (1992), the Supreme Court reaffirmed the physical presence requirement but admitted that “contemporary Commerce Clause jurisprudence might not dictate the same result” as the Court had reached in Bellas Hess.

The State and Local Legal Center (SLLC) filed a Supreme Court amicus brief in one of the most important cases of the organization's 35-year tenure:  South Dakota v. Wayfair.  

In this case South Dakota is asking the Supreme Court to rule that states and local governments may require retailers with no in-state physical presence to collect sales tax. Ruling this way will require the Supreme Court to overturn long-standing precedent.  

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.

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