Brief Background on South Dakota v.Wayfair
On Thursday, June 21st, 2018 the Supreme court ruled in favor of South Dakota allowing states to collect sales tax from online retailers. This ruling effectively reverses the decision the Court made in 1992. In Quill Corp. v. North Dakota, 504 U.S. 298 (1992), the Supreme Court ruled that businesses did not have to collect sales & use tax in a state where they did not have a physical nexus.
What is Next?
Over the next 3 – 6 months we will see states pass various forms of legislation in light of the Supreme Court Ruling. Those states with legislation already in place will most likely issue an effective date for remote sellers to register and collect sales tax. Companies must decide to register, collect and remit now or wait until each state chooses an effective date for each law. South Dakota must conclude the legal proceeding initiated in 2016 as currently there is an injunction in place.