I’m sure you’ve heard that buying stuff on the internet is becoming more and more common; in fact, internet sales accounted for almost 12% of all retail sales in the United States in 2016 (https://tinyurl.com/y9rexb2g).  For better or for worse, people are starting to prefer shopping in their pajamas over visiting local businesses (editor’s note:  I’m a big supporter of “buying local”).

Because of this trend, states are losing valuable revenue:  they can’t tax internet sales if the seller has no physical connection (or, legally, “nexus”) to the state.  So, state legislatures are fighting back by passing laws to require internet sellers to remit taxes that should be collected from buyers in the state; in other words, the nexus is the buyer, not the seller.  South Dakota enacted its own law on this subject in 2016 and was quickly challenged by out-of-state retailers.  Ultimately, on September 13, 2017, the Supreme Court of South Dakota held that the law was unconstitutional as it violated the Commerce Clause of the U.S. Constitution (State of South Dakota v. Wayfair Inc., Overstock.com, Inc., and NewEgg Inc., 2017 S.D. 56) because the seller had not physical presence in the state.  http://ujs.sd.gov/uploads/sc/opinions/28160.pdf

So the question may now go to the U.S. Supreme Court should South Dakota elect to appeal.  If it does, how would the justices decide?  Previous decisions by the Supreme Court seem to indicate that they would decide in favor of internet retailers so states can’t collect sales tax from web retailers (see, Quill Corp. v. North Dakota, 504 U.S. 298, 112 S. Ct. 1904, 119 L. Ed. 2d 91 (1992)).  But there really weren’t any internet sales in 1992 so this case may be different enough from facts in other cases that the Court could go the other way.  But no matter which way the Court may hold, the impact of any such decision would have huge implications in the retail world.  So, WWAD?  Or rather, What Must Amazon Do (in the future)?

http://www.jdsupra.com/legalnews/south-dakota-supreme-court-rules-in-80341/