SEMA eNews Vol. 21, No. 3, January 18, 2018

U.S. Supreme Court to Reconsider 1992 Internet Sales Tax Decision

By SEMA Washington, D.C., Staff

The U.S. Supreme Court has agreed to consider whether states can require internet retailers to collect sales taxes even when they have no physical presence in the state. The court is revisiting the 1992 “Quill vs. North Dakota” decision, which said that retailers must have a certain level of physical presence (nexus) in a state before that state can force the retailer to collect taxes. The Supreme Court noted that Congress could enact legislation to authorize collection, but that has not occurred to date. 

The state of South Dakota has pursued a case which contends that the 1992 decision is obsolete in the e-commerce era. In 2016, South Dakota passed legislation requiring out-of-state retailers to collect sales taxes. Lower courts blocked the law, citing the Quill case. The court will likely hear the case this spring and could issue a decision this summer. 

For more information, contact Daniel Ingber at danieli@sema.org.

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