What is the Result of South Dakota v. Wayfair?
In 2018, the Supreme Court released its decision on the landmark sales tax case, South Dakota v. Wayfair. The Court overturned the “physical presence” standard that previously governed the determination of when sales tax was due. Wayfair held that the correct standard in determining the constitutionality of a state sales tax law is whether the tax applies to an activity that has “substantial nexus” with the taxing state.
State officials around the country continue to implement a range of possibilities for taxing sales by remote sellers to take advantage of the new economic Wayfair test, and the landscape is changing rapidly.
The Wayfair decision has made it critical for remote sellers to review their current business against existing and quickly evolving state legislation to make determinations as to which states they may now be required to collect and remit sales tax.