In a 5-4 ruling the Supreme Court issued their decision opening the door for states and localities to collect sales tax on purchases made on the internet.  This decision overturns the long-standing decision in Quill issued by the Supreme Court in 1992 requiring a physical presence test be met by sellers in the jurisdiction imposing the tax.  While no longer requiring a physical presence test for the requirement to collect sales tax, the decision leaves open many questions for the individual state courts to address.  In this case, South Dakota v. Wayfair, Inc., the court remanded the case back to the state courts but it implies that the South Dakota statue would meet the constitutional muster required even though the Supreme Court did not rule that the law passes the Commerce Claus in its entirety.  The South Dakota legislation contains a de minimus threshold of $100,000 of goods sold or 200 transactions.  It is likely that states will move quickly to adopt similar statutes while waiting for the South Dakota court to issue its ruling.  Businesses that sell on the internet will now need to focus on transaction details in determining Sales Tax Nexus vs. physical facilities and other indicators of physical presence. We will continue to monitor these events to provide updates.  Please contact us if you have additional questions.

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