U.S. Supreme Court Agrees to Hear Internet Sales Tax Case

On January 12, 2018, the U.S. Supreme Court agreed to hear the Internet sales tax case South Dakota v. Wayfair Inc., case number 17-494, in the possibility of overturning a landmark decision almost 26 years ago, Quill v. North Dakota. The current law of the land for sales and use tax nexus is physical presence; however, that may be in jeopardy. 

The South Dakota case involves a law passed in 2016 requiring remote sellers to collect and remit sales tax if they exceed a certain economic nexus standard. (View Economic Nexus Reporting Requirements Reference Table.) Since then, a number of other states have enacted similar economic nexus reporting requirements. This case is significant because if Quill is ultimately overturned, more states will pass economic nexus reporting requirements to compel remote sellers to collect and remit sales tax.

If Quill is not overturned by the U.S. Supreme Court, watch for more states to pass either notice reporting requirements or a hybrid of economic nexus/cookie nexus to compel remote sellers to collect and remit sales tax.