The topic of this item is the recent US Supreme Court decision in South Dakota v. Wayfair, Inc., in which prior “nexus” precedents were over-ruled and South Dakota’s Internet sales tax law was upheld. The law purported to tax Internet sales “as if the seller has a physical presence in the state,” provided that the seller delivers more than $100,000 of goods or services into the state or engages in 200 or more separate transactions. In a 5-4 ruling, the Court held that South Dakota’s law could be enforced, in part because it exempts small Internet sellers and thus was not an undue burden on interstate commerce. The Court opinion can be found here: https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf
Some other states passed similar laws in anticipation of the court’s ruling. Nationally, it is likely that many more will now adopt Internet sales tax schemes patterned on South Dakota’s – that state’s having been blessed as OK. Until new laws are passed, however, states cannot start levying sales tax on out-of-state Internet sellers. If your business engages in Internet sales and you have questions about how the Wayfair case might affect you, please give our law firm a call.