By Eileen Reichenberg Sherr, CPA, CGMA
The Supreme Court heard oral arguments in a case with broad remote sales tax collection ramifications on Tuesday. In the case of South Dakota v. Wayfair, Inc., No. 17-494, the Court is being asked to overturn its decision in Quill Corp. v. North Dakota, 504 U.S. 298 (1992), and allow states to assert nexus for sales and use tax purposes without requiring the seller's physical presence in the state.
Quill was decided 26 years ago, but e-commerce has changed the landscape, prompting South Dakota to pursue this case. The case involves a South Dakota law enacted in 2016, S.B. 106, which provides that any business with annual sales of more than $100,000 or 200 separate transactions in South Dakota must collect and remit South Dakota sales tax. During oral arguments, Justice Samuel Alito described the South Dakota law as a “test case” that was “devised to present the most reasonable incarnation of this scheme” (transcript p. 27).