In South Dakota v. Wayfair 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. Doing so will require the Court to overrule Quill v. North Dakota (1992), where it held that states and local governments cannot require a business to collect sales tax unless the business has a physical presence in the state.
Based on oral argument the Court is likely to follow one of three paths. It could keep the physical presence test and not overturn Quill. It could overturn Quill and replace (or add to) the physical presence test an economic nexus test (like the South Dakota law which requires out-of-state vendors to collect tax only if they annually conduct $100,000 worth of business or 200 separate transactions annually in the state). Finally, it could overturn Quill and allow states to require all out-of-state vendors to collect sales tax no matter how much (or little) business they do in a state.